BRISTOL MYERS SQUIBB CO, 10-Q filed on 7/24/2014
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2014
Document and Entity Information [Abstract]
 
Entity Registrant Name
BRISTOL MYERS SQUIBB CO 
Entity Central Index Key
0000014272 
Entity Well-known Seasoned Issuer
Yes 
Entity Current Reporting Status
Yes 
Entity Voluntary Filers
No 
Entity Filer Category
Large Accelerated Filer 
Entity Common Stock, Shares Outstanding
1,657,904,666 
Document Type
10-Q 
Document Period End Date
Jun. 30, 2014 
Document Fiscal Year Focus
2014 
Document Fiscal Period Focus
Q2 
Current Fiscal Year End Date
--12-31 
Amendment Flag
false 
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Income Statement [Abstract]
 
 
 
 
Net product sales
$ 2,770 
$ 3,024 
$ 5,577 
$ 5,981 
Alliance and other revenues
1,119 
1,024 
2,123 
1,898 
Total revenues
3,889 
4,048 
7,700 
7,879 
Cost of products sold
991 
1,108 
1,959 
2,171 
Marketing, selling and administrative
951 
1,042 
1,908 
2,036 
Advertising and product promotion
187 
218 
350 
407 
Research and development
1,416 
951 
2,362 
1,881 
Other (income)/expense
(104)
199 
(312)
180 
Total Expenses
3,441 
3,518 
6,267 
6,675 
Earnings Before Income Taxes
448 
530 
1,433 
1,204 
Provision for income taxes
114 
 
163 
51 
Net Earnings
334 
530 
1,270 
1,153 
Net Earnings/(Loss) Attributable to Noncontrolling Interest
(1)
 
(8)
Net Earnings Attributable to BMS
$ 333 
$ 536 
$ 1,270 
$ 1,145 
Earnings per Common Share
 
 
 
 
Basic
$ 0.20 
$ 0.33 
$ 0.77 
$ 0.70 
Diluted
$ 0.20 
$ 0.32 
$ 0.76 
$ 0.69 
Cash dividends declared per common share
$ 0.36 
$ 0.35 
$ 0.72 
$ 0.70 
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
COMPREHENSIVE INCOME
 
 
 
 
Net Earnings
$ 334 
$ 530 
$ 1,270 
$ 1,153 
Other Comprehensive Income/(Loss), net of taxes and reclassifications to earnings [Abstract]
 
 
 
 
Derivatives qualifying as cash flow hedges
(5)
(3)
(8)
38 
Pension and postretirement benefits
13 
697 
(101)
724 
Available for sale securities
13 
(50)
15 
(46)
Foreign currency translation
21 
(33)
10 
(34)
Other Comprehensive Income/(Loss)
42 
611 
(84)
682 
Comprehensive Income/(Loss)
376 
1,141 
1,186 
1,835 
Comprehensive (Income) Loss, Net of Tax, Attributable to Noncontrolling Interest
(6)
 
Comprehensive Income Attributable to BMS
$ 375 
$ 1,147 
$ 1,186 
$ 1,827 
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Current Assets:
 
 
Cash and cash equivalents
$ 4,282 
$ 3,586 
Marketable Securities, Current
2,893 
939 
Receivables
3,315 
3,360 
Inventories
1,666 
1,498 
Deferred income taxes
1,356 
1,701 
Prepaid expenses and other
512 
412 
Assets held-for-sale, Current
38 
7,420 
Total Current Assets
14,062 
18,916 
Property, plant and equipment
4,438 
4,579 
Goodwill
7,046 
7,096 
Other intangible assets
1,843 
2,318 
Deferred income taxes
875 
508 
Marketable Securities, Noncurrent
3,876 
3,747 
Other assets
1,363 
1,428 
Total Assets
33,503 
38,592 
Current Liabilities:
 
 
Short-term borrowings and current portion of long-term debt
365 
359 
Accounts payable
2,405 
2,559 
Accrued expenses
2,204 
2,152 
Deferred income
1,090 
756 
Accrued rebates and returns
909 
889 
Income taxes payable
204 
160 
Dividends payable
621 
634 
Liabilities related to assets held-for-sale
 
4,931 
Total Current Liabilities
7,798 
12,440 
Pension, postretirement, and postemployment liabilities
681 
718 
Deferred income
1,042 
769 
Income taxes payable
545 
750 
Deferred income taxes
62 
73 
Other liabilities
624 
625 
Long-term debt
7,372 
7,981 
Total Liabilities
18,124 
23,356 
Commitments and contingencies (Note 19)
   
   
Bristol-Myers Squibb Company Shareholders' Equity:
 
 
Preferred stock, $2 convertible series, par value $1 per share: Authorized 10 million shares; issued and outstanding 4,252 in 2014 and 4,369 in 2013, liquidation value of $50 per share
Common stock, par value of $0.10 per share: Authorized 4.5 billion shares; 2.2 billion issued in both 2014 and 2013
221 
221 
Capital in excess of par value of stock
1,479 
1,922 
Accumulated other comprehensive loss
(2,225)
(2,141)
Retained earnings
33,026 
32,952 
Less cost of treasury stock - 551 million common shares in 2014 and 559 million in 2013
(17,174)
(17,800)
Total Bristol-Myers Squibb Company Shareholders' Equity
15,327 
15,154 
Noncontrolling interest
52 
82 
Total Equity
15,379 
15,236 
Total Liabilities and Equity
$ 33,503 
$ 38,592 
CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) (USD $)
Jun. 30, 2014
Dec. 31, 2013
Statement of Financial Position [Abstract]
 
 
Preferred stock, $2 convertible series, par value
$ 1 
 
Preferred stock, $2 convertible series, shares authorized
10,000,000 
 
Preferred stock, $2 convertible series, shares issued
4,237 
4,369 
Preferred stock, $2 convertible series, shares outstanding
4,237 
4,369 
Preferred stock, $2 convertible series, liquidation value, per share
$ 50 
 
Common stock, par value
$ 0.1 
 
Common stock, shares authorized
4,500,000,000 
 
Common stock, shares issued
2,200,000,000 
2,200,000,000 
Treasury stock, shares
550,000,000 
559,000,000 
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Cash Flows From Operating Activities:
 
 
Net Earnings
$ 1,270 
$ 1,153 
Adjustments to reconcile net earnings to net cash provided by operating activities:
 
 
Net earnings attributable to noncontrolling interest
 
(8)
Depreciation and amortization, net
252 
402 
Deferred income taxes
36 
(335)
Stock-based compensation
99 
95 
Impairment charges
358 
Other adjustments
(118)
(11)
Changes in operating assets and liabilities:
 
 
Receivables
(31)
(404)
Inventories
(157)
(173)
Accounts payable
(112)
203 
Deferred income
423 
619 
Income taxes payable
(191)
(31)
Other
(156)
(432)
Net Cash Provided by Operating Activities
1,673 
1,082 
Cash Flows From Investing Activities:
 
 
Sale and maturities of marketable securities
938 
1,278 
Purchases of marketable securities
(3,008)
(850)
Additions to property, plant and equipment and capitalized software
(228)
(213)
Proceeds from sale of business
3,159 
 
Other investing activities
(160)
Net Cash Provided by Investing Activities
701 
218 
Cash Flows From Financing Activities:
 
 
Short-term debt borrowings, net
(79)
Proceeds from issuance of long-term debt
 
12 
Repayments of long-term debt
(676)
 
Interest rate swap contract terminations
(4)
 
Issuances of common stock
200 
443 
Repurchases of common stock
 
(380)
Dividends
(1,203)
(1,155)
Net Cash Used in Financing Activities
(1,678)
(1,159)
Effect of Exchange Rates on Cash and Cash Equivalents
 
24 
Increase in Cash and Cash Equivalents
696 
165 
Cash and Cash Equivalents at Beginning of Period
3,586 
1,656 
Cash and Cash Equivalents at End of Period
$ 4,282 
$ 1,821 
BASIS OF PRESENTATION
Basis Of Presentation [Text Block]
BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING STANDARDS

Bristol-Myers Squibb Company (which may be referred to as Bristol-Myers Squibb, BMS or the Company) prepared these unaudited consolidated financial statements following the requirements of the Securities and Exchange Commission (SEC) and United States (U.S.) generally accepted accounting principles (GAAP) for interim reporting. Under those rules, certain footnotes and other financial information that are normally required for annual financial statements can be condensed or omitted. The Company is responsible for the consolidated financial statements included in this Form 10-Q. These consolidated financial statements include all normal and recurring adjustments necessary for a fair presentation of the financial position at June 30, 2014 and December 31, 2013, and the results of operations for the three and six months ended June 30, 2014 and 2013, and cash flows for the six months ended June 30, 2014 and 2013. All intercompany balances and transactions have been eliminated. These unaudited consolidated financial statements and the related notes should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2013 included in the Annual Report on Form 10-K (2013 Form 10-K).

Certain prior period amounts were reclassified to conform to the current period presentation. Net product sales and alliance and other revenues previously presented in the aggregate as net sales in the consolidated statements of earnings are now presented separately.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Accordingly, the results and trends in these unaudited consolidated financial statements may not be indicative of full year operating results. The preparation of financial statements requires the use of management estimates and assumptions. The most significant assumptions are employed in estimates used in determining the fair value and potential impairment of intangible assets; sales rebate and return accruals; legal contingencies; income taxes; estimated selling prices used in multiple element arrangements; and pension and postretirement benefits. Actual results may differ from estimated results.

In April 2014, the Financial Accounting Standards Board (FASB) issued amended guidance on the use and presentation of discontinued operations in an entity's consolidated financial statements. The new guidance restricts the presentation of discontinued operations to business circumstances when the disposal of business operations represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The guidance becomes effective on January 1, 2015. Adoption is on a prospective basis.

In May 2014, the FASB issued a new standard related to revenue recognition, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new standard will replace most of the existing revenue recognition standards in U.S. GAAP when it becomes effective on January 1, 2017. Early adoption is not permitted. The new standard can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company is assessing the potential impact of the new standard on financial reporting and has not yet selected a transition method.
BUSINESS SEGMENT INFORMATION
Business Segment Information [Text Block]
BUSINESS SEGMENT INFORMATION

BMS operates in a single segment engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of innovative medicines that help patients prevail over serious diseases. A global research and development organization and supply chain organization are utilized and responsible for the development and delivery of products to the market. Regional commercial organizations distribute and sell the products. The business is also supported by global corporate staff functions. Segment information is consistent with the financial information regularly reviewed by the chief executive officer for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting future periods.

Product revenues were as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Virology
 
 
 
 
 
 
 
Baraclude (entecavir)
$
369

 
$
371

 
$
775

 
$
737

Reyataz (atazanavir sulfate)
362

 
431

 
706

 
792

Sustiva (efavirenz) Franchise(a)
361

 
411

 
680

 
798

Oncology
 
 
 
 
 
 
 
Erbitux* (cetuximab)
186

 
171

 
355

 
333

Sprycel (dasatinib)
368

 
312

 
710

 
599

Yervoy (ipilimumab)
321

 
233

 
592

 
462

Neuroscience
 
 
 
 
 
 
 
Abilify* (aripiprazole)(b)
555

 
563

 
1,095

 
1,085

Immunoscience
 
 
 
 
 
 
 
Orencia (abatacept)
402

 
352

 
765

 
672

Cardiovascular
 
 
 
 
 
 
 
Eliquis (apixaban)
171

 
12

 
277

 
34

Diabetes Alliance(c)
27

 
438

 
206

 
796

Mature Products and All Other(d)
767

 
754

 
1,539

 
1,571

Total Revenues
$
3,889

 
$
4,048

 
$
7,700

 
$
7,879

*
Indicates brand names of products which are trademarks not owned or wholly owned by BMS. Specific trademark ownership information can be found at the end of this quarterly report on Form 10-Q.
(a)
Includes alliance and other revenue of $313 million and $346 million for three months ended June 30, 2014 and 2013, respectively, and $585 million and $670 million for the six months ended June 30, 2014 and 2013, respectively.
(b)
Includes alliance and other revenue of $499 million and $454 million for three months ended June 30, 2014 and 2013, respectively, and $940 million and $849 million for the six months ended June 30, 2014 and 2013, respectively.
(c)
Includes Bydureon* (exenatide extended-release for injectable suspension), Byetta* (exenatide), Farxiga*/Xigduo* (dapagliflozin/dapagliflozin and metformin hydrochloride), Onglyza*/Kombiglyze* (saxagliptin/saxagliptin and metformin), Myalept* (metreleptin) and Symlin* (pramlintide acetate).
(d)
Includes Plavix* (clopidogrel bisulfate) revenues of $45 million and $44 million for the three months ended June 30, 2014 and 2013, respectively, and $93 million and $135 million for the six months ended June 30, 2014 and 2013, respectively. Additionally, includes Avapro*/Avalide* (irbesartan/irbesartan-hydrochlorothiazide) revenues of $59 million and $56 million for the three months ended June 30, 2014 and 2013, respectively, and $115 million and $102 million for the six months ended June 30, 2014 and 2013, respectively.
ALLIANCES AND COLLABORATIONS
Alliances and Collaborations [Text Block]
ALLIANCES

BMS enters into collaboration arrangements with third parties for the development and commercialization of certain products. Although each of these arrangements is unique in nature, both parties are active participants in the operating activities of the collaboration and are exposed to significant risks and rewards depending on the commercial success of the activities. BMS may either in-license intellectual property owned by the other party or out-license its intellectual property to the other party. These arrangements also typically include research, development, manufacturing, and/or commercial activities and can cover a single investigational compound or commercial product or multiple compounds and/or products in various life cycle stages. We refer to these collaborations as alliances and our partners as alliance partners. Several key products such as Abilify*, Sprycel, Sustiva (Atripla*), Erbitux* and Eliquis, as well as products comprising the diabetes alliance discussed below and certain mature and other brands are included in alliance arrangements.

Selected financial information pertaining to our alliances was as follows, including net product sales when BMS is the principal in the third-party customer sale for products subject to the alliance. Expenses summarized below do not include all amounts attributed to the activities for the products in the alliance, but only the payments between the alliance partners or the related amortization if the payments were deferred or capitalized.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Revenues from alliances:
 
 
 
 
 
 
 
Net product sales
$
782

 
$
1,054

 
$
1,677

 
$
2,077

Alliance and other revenues
1,039

 
958

 
1,951

 
1,767

Total Revenues
1,821

 
2,012

 
3,628

 
3,844

 
 
 
 
 
 
 
 
Payments to/(from) alliance partners:
 
 
 
 
 
 
 
Cost of products sold
323

 
338

 
678

 
627

Marketing, selling and administrative
6

 
(27
)
 
3

 
(69
)
Advertising and product promotion
32

 
(7
)
 
67

 
(22
)
Research and development
(4
)
 
(31
)
 
(35
)
 
(55
)
Other (income)/expense
(158
)
 
(100
)
 
(553
)
 
(172
)
 
 
 
 
 
 
 
 
Net earnings/(losses) attributable to noncontrolling interest, pre-tax
7

 
(1
)
 
11

 
23


Selected Alliance Balance Sheet information:
 
 
 
Dollars in Millions
June 30,
2014
 
December 31,
2013
Receivables - from alliance partners
$
1,033

 
$
1,122

Accounts payable - to alliance partners
1,552

 
1,396

Deferred income from alliances(a)
1,958

 
5,089


(a)
Included deferred income classified as liabilities related to assets held-for-sale of $3,671 million at December 31, 2013.

Specific information pertaining to each of our significant alliances is discussed in our 2013 Form 10-K, including their nature and purpose, the significant rights and obligations of the parties, and specific accounting policy elections. Significant developments and updates related to alliances for the first half of 2014 are set forth below.

AstraZeneca

In February 2014, BMS and AstraZeneca terminated their alliance agreements and BMS sold to AstraZeneca substantially all of the diabetes business comprising the alliance. Previously, BMS had an alliance with AstraZeneca consisting of three worldwide codevelopment and commercialization agreements covering (1) Onglyza* and related combination products sold under various names, (2) Farxiga* and related combination products and, (3) beginning in August 2012 after BMS's acquisition of Amylin Pharmaceuticals, Inc. (Amylin), Amylin's portfolio of products including Bydureon*, Byetta*, Symlin* and Myalept*, as well as certain assets owned by Amylin, including a manufacturing facility located in West Chester, Ohio.

The divestiture included the shares of Amylin and the resulting transfer of its Ohio manufacturing facility; the intellectual property related to Onglyza* and Farxiga* (including BMS's interest in the out-licensing agreement for Onglyza* in Japan); and the future purchase of BMS’s manufacturing facility located in Mount Vernon, Indiana in 2015. Substantially all employees dedicated to the diabetes business were transferred to AstraZeneca. The sale of the business has been completed in all jurisdictions except for Onglyza* and Farxiga* in China, pending consent from BMS's joint venture partners. For accounting purposes AstraZeneca is the principal for the end-customer product sales in all markets (except China) beginning February 1, 2014.

In connection with the sale, BMS and AstraZeneca entered into several agreements, including a transitional services agreement, a supply agreement and a development agreement. Under those agreements, BMS is obligated to provide transitional services such as accounting, financial services, customer service, distribution, regulatory, development, information technology and certain other administrative services for various periods in order to facilitate the orderly transfer of the business operations; to supply certain products, including the active product ingredients for Onglyza* and Farxiga* through 2020; and to perform ongoing development activities for certain clinical trial programs through 2016, among other things. The expected annual costs attributed to the development agreement are approximately $227 million in 2014, $127 million in 2015 and $84 million in 2016.

Consideration for the transaction includes a $2.7 billion payment at closing; contingent regulatory and sales-based milestone payments of up to $1.4 billion (including $800 million related to approval milestones and $600 million related to sales-based milestones, payable in 2020); royalty payments based on net sales through 2025 and payments up to $225 million if and when certain assets are transferred to AstraZeneca. AstraZeneca will also pay BMS for any required product supply at a price approximating the product cost as well as negotiated transitional service fees.

Royalty rates on net sales are as follows:
 
2014
2015
2016
2017 - 2025
Onglyza* and Farxiga* Worldwide Net Sales up to $500 million
44
%
35
%
27
%
12-25%
Onglyza* and Farxiga* Worldwide Net Sales over $500 million
3
%
7
%
9
%
12-25%
Amylin products U.S. Net Sales

2
%
2
%
5-12%


The stock and asset purchase agreement contains multiple elements to be delivered subsequent to the closing of the transaction, including the China diabetes business, the Mount Vernon manufacturing facility, and the activities under the development and supply agreements. Each of these elements was determined to have a standalone value. As a result, a portion of the consideration received at closing was allocated to the undelivered elements using the relative selling price method after determining the best estimated selling price for each element. The remaining amount of consideration was included in the calculation for the gain on sale of the diabetes business. Contingent milestone and royalty payments are similarly allocated among the underlying elements if and when the amounts are determined to be payable to BMS. Amounts allocated to the sale of the business are immediately recognized in the results of operations.  Amounts allocated to the other elements are recognized in the results of operations only to the extent each element has been delivered.

Consideration of $3.6 billion was accounted for in 2014, substantially all in the first quarter (including royalties and $700 million of contingent regulatory milestone payments related to the approval of Farxiga* in both the U.S. and Japan). Approximately $2.9 billion of the consideration was allocated to the sale of the business and the remaining $667 million was allocated to the undelivered elements described above. The gain on sale of the diabetes business was $247 million. The gain was based on the difference between the consideration allocated to the sale of the business (net of transaction fees) and the carrying value of the diabetes business net assets (including a $600 million allocation of goodwill and the reversal of $821 million of net deferred tax liabilities attributed to Amylin). The consideration includes $169 million of earned royalties, of which $138 million was allocated to the sale of the business and included in other income and $31 million was allocated to the undelivered elements.

Consideration allocated to the China business and Mount Vernon manufacturing facility will continue to be deferred until those assets are transferred to AstraZeneca. Consideration allocated to the development and supply agreements will continue to be amortized over the applicable service periods. Amortization of deferred income attributed to the development agreement was included in other income as the sale of these services are not considered part of BMS’s ongoing major or central operations. Revenues attributed to the supply agreement were included in alliance and other revenues.

Consideration for the transaction is presented for cash flow purposes based on the allocation process described above, either as an investing activity if attributed to the sale of the business or related assets or as an operating activity if attributed to the transitional services, supply arrangement or development agreement.
Summarized financial information related to the AstraZeneca alliances was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Revenues from AstraZeneca alliances:
 
 
 
 
 
 
 
Net product sales
$
2

 
$
431

 
$
161

 
$
786

Alliance and other revenues
26

 
5

 
45

 
9

Total Revenues
28

 
436

 
206

 
795

 
 
 
 
 
 
 
 
Payments to/(from) AstraZeneca:
 
 
 
 
 
 
 
Cost of products sold:
 
 
 
 
 
 
 
Profit sharing
1

 
178

 
77

 
324

Amortization of deferred income

 
(74
)
 

 
(149
)
 
 
 
 
 
 
 
 
Cost reimbursements to/(from) AstraZeneca recognized in:
 
 
 
 
 
 
 
Cost products sold

 
(6
)
 
(9
)
 
(9
)
Marketing, selling and administrative
4

 
(34
)
 
(7
)
 
(71
)
Advertising and product promotion
(1
)
 
(7
)
 
(4
)
 
(18
)
Research and development
(2
)
 
(21
)
 
(9
)
 
(43
)
 
 
 
 
 
 
 
 
Other (income)/expense:
 
 
 
 
 
 
 
Amortization of deferred income
(21
)
 
(8
)
 
(34
)
 
(15
)
Provision for restructuring

 
(20
)
 
(2
)
 
(25
)
Royalties
(90
)
 

 
(138
)
 

Transitional services
(34
)
 

 
(65
)
 

Gain on sale of business
12

 

 
(247
)
 

 
 
 
 
 
 
 
 
Selected Alliance Cash Flow information:
 
 
 
 
 
 
 
Deferred income
14

 

 
289

 
80

Proceeds from sale of business
99

 

 
3,154

 

Other investing activities
53

 

 
53

 

Selected Alliance Balance Sheet information:
 
 
 
Dollars in Millions
June 30,
2014
 
December 31,
2013
Deferred income attributed to:
 
 
 
Non-refundable upfront, milestone and other licensing receipts(a)
$

 
$
3,671

Assets not yet transferred to AstraZeneca
369

 

Services not yet performed for AstraZeneca
260

 


(a)
Included in liabilities related to assets held-for-sale at December 31, 2013.
Otsuka
BMS's commercialization rights to Abilify* in European Union (EU) countries expired in June 2014.
As described in the 2013 Form 10-K, BMS recognizes revenue for Abilify* in the U.S. based on the expected annual contractual share using a forecast of net sales for the year. The percentage is estimated each quarter and determined to be 33% and 34% for the six months ended June 30, 2014 and 2013, respectively.
Gilead
As described in the 2013 Form 10-K, effective January 1, 2014, following the European loss of exclusivity for Sustiva, the percentage of Atripla* net sales in Europe recognized by BMS is equal to the difference between the average net selling prices of Atripla* and Truvada* (emtricitabine and tenofovir disoproxil fumarate). This alliance will continue until either party terminates the arrangement or the last patent expiration occurs for Atripla*, Truvada* or Sustiva.
Pfizer
As described in the 2013 Form 10-K, BMS has an alliance with Pfizer relating to Eliquis. In 2014, BMS received $60 million from Pfizer for milestone payments related to the acceptance of the filing in the U.S. for the treatment of venous thromboembolism indication and the launch of Eliquis in the U.S. for the prevention of deep vein thrombosis in patients who have undergone hip or knee surgery.

Valeant

As described in the 2013 Form 10-K, BMS has an alliance with Valeant for certain mature brands in Europe. In March 2014, Valeant notified BMS that it will exercise its option to acquire the trademarks and intellectual property exclusively related to the products at a price determined based on a multiple of sales (expected to be approximately $60 million). The closing is expected to occur in January 2015. In addition, a $16 million charge was included in other expense to increase the fair value of the option to $34 million.

Reckitt Benckiser Group plc

As described in the 2013 Form 10-K, BMS has an alliance with Reckitt Benckiser Group plc (Reckitt) covering certain BMS over-the-counter products sold primarily in Mexico and Brazil. Reckitt also has an option to acquire all remaining rights in such products for those markets and related inventories at the end of the alliance period (May 2016). In April 2014, the alliance was modified to provide an option to Reckitt to purchase a BMS manufacturing facility located in Mexico primarily dedicated to the products included in the alliance. The options can only be exercised together. Substantially all employees at the facility are expected to be transferred to Reckitt if the option is exercised. A $15 million charge was included in other expense to increase the fair value of the option to $129 million.
ACQUISITIONS ACQUISITIONS
Asset acquisition [Text Block]
ACQUISITIONS

In April 2014, BMS acquired all of the outstanding shares of iPierian, Inc. (iPierian), a biotechnology company focused on new treatments for tauopathies, a class of neurodegenerative diseases. The acquisition provides BMS with full rights to IPN007, a preclinical monoclonal antibody to treat progressive supranuclear palsy and other tauopathies. The consideration includes an upfront payment of $175 million, contingent development and regulatory milestone payments up to $550 million and future royalties on net sales if any of the acquired preclinical assets are approved and commercialized. No significant iPierian processes were acquired, therefore the transaction was accounted for as an asset acquisition because iPierian was determined not to be a "business" as that term is defined in ASC 805 - Business Combinations. The upfront payment allocated to IPN007 was $148 million and included in research and development expenses. The remaining $27 million was allocated to deferred tax assets for net operating losses and tax credit carryforwards.
ASSETS HELD-FOR-SALE
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]
ASSETS HELD-FOR-SALE

As discussed in "Note 3. Alliances", BMS sold its diabetes business to AstraZeneca in February 2014 which previously comprised the global alliance with them. See Note 3 for further information on the transaction. The diabetes business was treated as a single disposal group held-for-sale as of December 31, 2013. No write-down was required as the fair value of the business less costs to sell exceeded the related carrying value.

The following assets and liabilities of the diabetes business held-for-sale were presented separately from BMS’s other accounts:
Dollars in Millions
 
December 31, 2013
Assets
 
 
Receivables
 
$
83

Inventories
 
163

Deferred income taxes - current
 
125

Prepaid expenses and other
 
20

Property, plant and equipment
 
678

Goodwill
 
550

Other intangible assets
 
5,682

Other assets
 
119

Total assets held-for-sale
 
7,420

 
 
 
Liabilities
 
 
Short-term borrowings and current portion of long-term debt
 
27

Accounts payable
 
30

Accrued expenses
 
148

Deferred income - current
 
352

Accrued rebates and returns
 
81

Deferred income - noncurrent
 
3,319

Deferred income taxes - noncurrent
 
946

Other liabilities
 
28

Total liabilities related to assets held-for-sale
 
$
4,931



Assets held-for-sale were $38 million at June 30, 2014, comprising of inventories not yet transferred to AstraZeneca.
OTHER (INCOME)/EXPENSE
Other (Income)/Expense [Text Block]
OTHER (INCOME)/EXPENSE
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Interest expense
$
46

 
$
50

 
$
100

 
$
100

Investment income
(28
)
 
(28
)
 
(51
)
 
(53
)
Provision for restructuring
16

 
173

 
37

 
206

Litigation charges/(recoveries)
(20
)
 
(22
)
 
9

 
(22
)
Equity in net income of affiliates
(33
)
 
(50
)
 
(69
)
 
(86
)
Gain on sale of product lines, businesses and assets
7

 

 
(252
)
 
(1
)
Other alliance and licensing income
(144
)
 
(32
)
 
(252
)
 
(89
)
Pension curtailments, settlements and special termination benefits
45

 
101

 
109

 
101

Other
7

 
7

 
57

 
24

Other (income)/expense
$
(104
)
 
$
199

 
$
(312
)
 
$
180

RESTRUCTURING
Restructuring [Text Block]
RESTRUCTURING

The following is the provision for restructuring:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Employee termination benefits
$
14

 
$
172

 
$
34

 
$
201

Other exit costs
2

 
1

 
3

 
5

Provision for restructuring
$
16

 
$
173

 
$
37

 
$
206



Restructuring charges included termination benefits for workforce reductions of manufacturing, selling, administrative, and research and development personnel across all geographic regions of approximately 220 and 890 for the three months ended June 30, 2014 and 2013, respectively, and approximately 400 and 1,135 for the six months ended June 30, 2014 and 2013, respectively.

The following table represents the activity of employee termination and other exit cost liabilities:
Dollars in Millions
2014
 
2013
Liability at January 1
$
102

 
$
167

Charges
40

 
209

Changes in estimates
(3
)
 
(3
)
Provision for restructuring
37

 
206

Foreign currency translation
1

 
1

Spending
(48
)
 
(130
)
Liability at June 30
$
92

 
$
244

INCOME TAXES
Income Taxes [Text Block]
INCOME TAXES

 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Earnings Before Income Taxes
$
448

 
$
530

 
$
1,433

 
$
1,204

Provision for Income Taxes
114

 

 
163

 
51

Effective tax rate
25.4
%
 

 
11.4
%
 
4.2
%


Changes in the effective tax rates between the current and prior period primarily resulted from the following items: 
The first quarter of 2014 includes a $96 million income tax benefit attributed to the sale of the diabetes business ($81 million for the six months ended June 30, 2014). This tax benefit resulted primarily from the capital loss deduction on the sale of the Amylin shares;
The impact of no tax benefit attributable to the $148 million research and development charge resulting from the acquisition of iPierian in the second quarter of 2014;
The first quarter of 2013 includes the retroactive reinstatement of the research and development tax credit and look through exception for the full year 2012 ($43 million). The applicable tax legislation for these items was not extended as of June 30, 2014, therefore the research and development tax credit was not considered in the 2014 effective tax rate;
All periods were impacted by other discrete tax benefits attributable to restructuring, impairment, pension settlements and other charges.

The effective tax rate is lower than the U.S. statutory rate of 35% primarily attributable to undistributed earnings of certain foreign subsidiaries that have been considered or are expected to be indefinitely reinvested offshore. These undistributed earnings primarily relate to operations in Ireland and Puerto Rico, which operate under favorable tax grants not scheduled to expire prior to 2023. If these undistributed earnings are repatriated to the U.S. in the future, or if it were determined that such earnings are to be remitted in the foreseeable future, additional tax provisions would be required. Reforms to U.S. tax laws related to foreign earnings have been proposed and if adopted, may increase taxes, which could reduce the results of operations and cash flows.

BMS is currently being audited by a number of tax authorities and significant disputes may arise related to issues such as transfer pricing, certain tax credits and the deductibility of certain expenses. BMS estimates that it is reasonably possible that the total amount of unrecognized tax benefits at June 30, 2014 could decrease in the range of approximately $300 million to $360 million in the next twelve months as a result of the settlement of certain tax audits and other events resulting in the payment of additional taxes, the adjustment of certain deferred taxes and/or the recognition of tax benefits. It is also reasonably possible that new issues will be raised by tax authorities which may require adjustments to the amount of unrecognized tax benefits; however, an estimate of such adjustments cannot reasonably be made at this time. BMS believes that it has adequately provided for all open tax years by tax jurisdiction.

Effective January 2014, the Company adopted an update from the FASB that clarified existing guidance on the presentation of unrecognized tax benefits when various qualifying tax benefit carryforwards exist, including when the unrecognized tax benefit should be presented as a reduction to deferred tax assets or as a liability. As a result, non-current deferred tax assets and income tax liabilities were reduced by $236 million.
EARNINGS PER SHARE
Earnings/(Loss) Per Share [Text Block]
EARNINGS PER SHARE
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Amounts in Millions, Except Per Share Data
2014
 
2013
 
2014
 
2013
Net Earnings Attributable to BMS used for Basic and Diluted EPS Calculation
$
333

 
$
536

 
$
1,270

 
$
1,145

 
 
 
 
 
 
 
 
Weighted-average common shares outstanding – basic
1,657

 
1,644

 
1,655

 
1,641

Contingently convertible debt common stock equivalents
1

 
1

 
1

 
1

Incremental shares attributable to share-based compensation plans
11

 
15

 
12

 
16

Weighted-average common shares outstanding – diluted
1,669

 
1,660

 
1,668

 
1,658

 
 
 
 
 
 
 
 
Earnings per Common Share
 
 
 
 
 
 
 
Basic
$
0.20

 
$
0.33

 
$
0.77

 
$
0.70

Diluted
$
0.20

 
$
0.32

 
$
0.76

 
$
0.69

 
 
 
 
 
 
 
 
Anti-dilutive weighted-average equivalent shares – stock incentive plans

 

 

 

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial Instruments [Text Block]
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
 
June 30, 2014
 
December 31, 2013
Dollars in Millions
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents - Money market and other securities
$

 
$
3,749

 
$

 
$
3,749

 
$

 
$
3,201

 
$

 
$
3,201

Marketable securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Certificates of deposit

 
1,813

 

 
1,813

 

 
122

 

 
122

Commercial paper

 
200

 

 
200

 

 

 

 

Corporate debt securities

 
4,640

 

 
4,640

 

 
4,432

 

 
4,432

Equity funds

 
94

 

 
94

 

 
74

 

 
74

Fixed income funds

 
10

 

 
10

 

 
46

 

 
46

Auction Rate Securities (ARS)

 

 
12

 
12

 

 

 
12

 
12

Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swap contracts

 
111

 

 
111

 

 
64

 

 
64

Foreign currency forward contracts

 
22

 

 
22

 

 
50

 

 
50

Investments in equity of other companies
53

 

 

 
53

 

 

 

 

Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swap contracts

 
(3
)
 

 
(3
)
 

 
(27
)
 

 
(27
)
Foreign currency forward contracts

 
(24
)
 

 
(24
)
 

 
(35
)
 

 
(35
)
Written option liabilities(a)

 

 
(198
)
 
(198
)
 

 

 
(162
)
 
(162
)
Contingent consideration liability(b)

 

 
(8
)
 
(8
)
 

 

 
(8
)
 
(8
)

(a)
Includes $69 million and $18 million in accrued expenses and $129 million and $144 million in other liabilities as of June 30, 2014 and December 31, 2013, respectively.
(b)
The contingent consideration liability is included in other liabilities.

As further described in "Note 10. Financial Instrument and Fair Value Measurement" in our 2013 Form 10-K, our fair value estimates use inputs that are either (1) quoted prices for identical assets or liabilities in active markets (Level 1 inputs), (2) observable prices for similar assets or liabilities in active markets or for identical or similar assets or liabilities in markets that are not active (Level 2 inputs) or (3) unobservable inputs (Level 3).
The following table summarizes the activity for financial assets and liabilities utilizing Level 3 fair value measurements:
 
2014
 
2013
Dollars in Millions
ARS
 
Contingent consideration liability
 
Written option liabilities
 
ARS and FRS(a)
 
Contingent consideration liability
 
Written option liabilities
Fair value at January 1
$
12

 
$
(8
)
 
$
(162
)
 
$
31

 
$
(8
)
 
$
(18
)
Additions from new alliances

 

 

 

 

 
(144
)
Changes in fair value

 

 
(36
)
 

 

 

Fair value at June 30
$
12

 
$
(8
)
 
$
(198
)
 
$
31

 
$
(8
)
 
$
(162
)

(a)
FRS: Floating Rate Securities

Available-for-sale Securities

The following table summarizes available-for-sale securities:
 
Dollars in Millions
Amortized
Cost
 
Gross
Unrealized
Gain in
Accumulated
OCI
 
Gross
Unrealized
Loss in
Accumulated
OCI
 
Fair Value
 
 
June 30, 2014
 
 
 
 
 
 
 
 
Certificates of deposit
$
1,813

 
$

 
$

 
$
1,813

 
Commercial paper
200

 

 

 
200

 
Corporate debt securities
4,592

 
51

 
(3
)
 
4,640

 
ARS
9

 
3

 

 
12

 
Investments in equity of other companies
41

 
18

 
(6
)
 
53

 
Total
$
6,655

 
$
72

 
$
(9
)
 
$
6,718

 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
Certificates of deposit
$
122

 
$

 
$

 
$
122

 
Corporate debt securities
4,401

 
44

 
(13
)
 
4,432

 
ARS
9

 
3

 

 
12

 
Total
$
4,532

 
$
47

 
$
(13
)
 
$
4,566



Available-for-sale securities included in current marketable securities were $2,789 million as of June 30, 2014 and $819 million as of December 31, 2013. Non-current available-for-sale corporate debt securities maturing within five years were $3,864 million as of June 30, 2014. ARS maturing beyond 10 years were $12 million as of June 30, 2014. Investments in equity of other companies of $53 million are included in other assets as of June 30, 2014.

Fair Value Option for Financial Assets

The Company invests in equity and fixed income funds that are designed to offset the changes in fair value of certain employee retirement benefits. Investments in equity and fixed income funds are included in current marketable securities and were $94 million and $10 million, respectively, as of June 30, 2014 and $74 million and $46 million, respectively, as of December 31, 2013. Investment income resulting from the change in fair value for the investments in equity and fixed income funds was not significant.

Qualifying Hedges
The following table summarizes the fair value of outstanding derivatives:
 
 
 
June 30, 2014
 
December 31, 2013
Dollars in Millions
Balance Sheet Location
 
Notional
 
Fair Value
 
Notional
 
Fair Value
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
Other assets
 
$
1,173

 
$
111

 
$
673

 
$
64

Interest rate swap contracts
Other liabilities
 
1,150

 
(3
)
 
1,950

 
(27
)
Foreign currency forward contracts
Prepaid expenses and other
 
187

 
17

 
301

 
44

Foreign currency forward contracts
Other assets
 
187

 
5

 
100

 
6

Foreign currency forward contracts
Accrued expenses
 
710

 
(22
)
 
704

 
(31
)
Foreign currency forward contracts
Other liabilities
 
109

 
(2
)
 
263

 
(4
)


Cash Flow Hedges — Foreign currency forward contracts are primarily utilized to hedge forecasted intercompany inventory purchase transactions in certain foreign currencies. These contracts are designated as cash flow hedges with the effective portion of changes in fair value being temporarily reported in accumulated other comprehensive loss and recognized in earnings when the hedged item affects earnings. The net losses on foreign currency forward contracts are expected to be reclassified to cost of products sold within the next two years. The notional amount of outstanding foreign currency forward contracts was primarily attributed to the Euro ($601 million) and Japanese yen ($319 million) at June 30, 2014.

Cash flow hedge accounting is discontinued when the forecasted transaction is no longer probable of occurring on the originally forecasted date, or 60 days thereafter, or when the hedge is no longer effective. Assessments to determine whether derivatives designated as qualifying hedges are highly effective in offsetting changes in the cash flows of hedged items are performed at inception and on a quarterly basis. Any ineffective portion of the change in fair value is included in current period earnings. The earnings impact related to discontinued cash flow hedges and hedge ineffectiveness was not significant during the six months ended June 30, 2014 and 2013.

Net Investment Hedges — Non-U.S. dollar borrowings of €541 million ($738 million) are designated to hedge the foreign currency exposures of the net investment in certain foreign affiliates. These borrowings are designated as net investment hedges and recognized in long-term debt. The effective portion of foreign exchange gains or losses on the remeasurement of the debt is recognized in the foreign currency translation component of accumulated other comprehensive loss with the related offset in long-term debt.

Fair Value Hedges — Fixed-to-floating interest rate swap contracts are designated as fair value hedges and are used as part of an interest rate risk management strategy to create an appropriate balance of fixed and floating rate debt. The swaps and underlying debt for the benchmark risk being hedged are recorded at fair value. When the underlying swap is terminated prior to maturity, the fair value basis adjustment to the underlying debt instrument is amortized into earnings as an adjustment to interest expense over the remaining term of the debt.

Fixed-to-floating interest rate swap contracts were executed in 2014 to convert $200 million notional amount from fixed rate to variable rate debt.

Long-term debt and the current portion of long-term debt includes:
Dollars in Millions
June 30,
2014
 
December 31,
2013
Principal Value
$
6,959

 
$
7,593

Adjustments to Principal Value:
 
 
 
Fair value of interest rate swap contracts
108

 
37

Unamortized basis adjustment from interest rate swap contract terminations
365

 
442

Unamortized bond discounts
(60
)
 
(64
)
Total
$
7,372

 
$
8,008

 
 
 
 
Current portion of long-term debt(a)
$

 
$
27

Long-term debt
7,372

 
7,981



(a)
Included in liabilities related to assets held-for-sale at December 31, 2013.

The fair value of debt was $8,011 million at June 30, 2014 and $8,487 million at December 31, 2013 and was valued using Level 2 inputs. Interest payments were $89 million and $105 million for the six months ended June 30, 2014 and 2013, respectively, net of amounts related to interest rate swap contracts.

No commercial paper borrowings were outstanding as of June 30, 2014.

The following information pertains to the outstanding 5.45% Notes due 2018 that were redeemed in February 2014:
 
Six Months Ended
Dollars in Millions
June 30, 2014
Principal amount
$
582

Carrying value
633

Debt redemption price
676

Notional amount of interest rate swap contracts terminated
500

Interest rate swap contract termination payments
(4
)
Total loss
45

RECEIVABLES
Receivables [Text Block]
RECEIVABLES

Dollars in Millions
June 30,
2014
 
December 31,
2013
Trade receivables
$
1,884

 
$
1,779

Less allowances
(85
)
 
(89
)
Net trade receivables
1,799

 
1,690

Alliance partners receivables
1,033

 
1,122

Prepaid and refundable income taxes
290

 
262

Other
193

 
286

Receivables
$
3,315

 
$
3,360



Non-U.S. receivables sold on a nonrecourse basis were $424 million and $505 million for the six months ended June 30, 2014 and 2013, respectively. In the aggregate, receivables due from our three largest pharmaceutical wholesalers in the U.S. represented 37% and 40% of total trade receivables at June 30, 2014 and December 31, 2013, respectively.
INVENTORIES
Inventories [Text Block]
INVENTORIES

Dollars in Millions
June 30,
2014
 
December 31,
2013
Finished goods
$
550

 
$
491

Work in process
800

 
757

Raw and packaging materials
316

 
250

Inventories
$
1,666

 
$
1,498



Inventories expected to remain on-hand beyond one year are included in other assets and were $269 million at June 30, 2014 and $351 million at December 31, 2013.
PROPERTY, PLANT AND EQUIPMENT
Property, Plant and Equipment [Text Block]
PROPERTY, PLANT AND EQUIPMENT

Dollars in Millions
June 30,
2014
 
December 31,
2013
Land
$
110

 
$
109

Buildings
4,806

 
4,748

Machinery, equipment and fixtures
3,773

 
3,699

Construction in progress
247

 
287

Gross property, plant and equipment
8,936

 
8,843

Less accumulated depreciation
(4,498
)
 
(4,264
)
Property, plant and equipment
$
4,438

 
$
4,579



The Mount Vernon, Indiana manufacturing facility's carrying value was approximately $276 million as of June 30, 2014. The facility is expected to be sold in 2015. It was not included in assets held-for-sale for both periods because the assets were not available for immediate sale in their present condition and were not expected to be sold within a year. See "Note 3. Alliances” for further discussion on the sale of the diabetes business.

Depreciation expense was $275 million and $219 million for the six months ended June 30, 2014 and 2013, respectively.
OTHER INTANGIBLE ASSETS
Goodwill and Intangible Assets Disclosure [Text Block]
OTHER INTANGIBLE ASSETS

Dollars in Millions
June 30,
2014
 
December 31,
2013
Licenses
$
1,151

 
$
1,162

Developed technology rights
2,468

 
2,486

Capitalized software
1,258

 
1,240

In-process research and development (IPRD)
205

 
548

Gross other intangible assets
5,082

 
5,436

Less accumulated amortization
(3,239
)
 
(3,118
)
Total other intangible assets
$
1,843

 
$
2,318



A $310 million IPRD impairment charge was recognized in the second quarter of 2014 for peginterferon lambda which is currently in Phase III development for treatment of hepatitis C virus. The full write-off  was  required after assessing the potential commercial viability of the asset and estimating its fair value. The assessment considered the lower likelihood of filing for registration in certain markets after completing revised projections of revenues and expenses. A significant decline from prior projected revenues resulted from the global introduction of oral non-interferon products being used to treat patients with hepatitis C virus and no other alternative uses for the product.

Amortization expense was $151 million and $431 million for the six months ended June 30, 2014 and 2013, respectively.
DEFERRED INCOME
Deferred Revenue Disclosure [Text Block]
DEFERRED INCOME
Dollars in Millions
June 30,
2014
 
December 31,
2013
Upfront, milestone and other licensing receipts
$
885

 
$
970

Atripla* deferred revenue
461

 
468

Gain on sale-leaseback transactions
57

 
71

Diabetes business divestiture (Undelivered elements)
629

 

Other
100

 
16

Total deferred income
$
2,132

 
$
1,525

 
 
 
 
Current portion
$
1,090

 
$
756

Non-current portion
1,042

 
769


Further information pertaining to upfront, milestone and other licensing payments is described in “Note 3. Alliances” in the Company’s 2013 Form 10-K.
Amortization of deferred income was $174 million and $248 million for the six months ended June 30, 2014 and 2013, respectively.
EQUITY
Stockholders' Equity Note Disclosure [Text Block]
EQUITY

 
Common Stock
 
Capital in  Excess
of Par Value
of Stock
 
Retained
Earnings
 
Treasury Stock
 
Noncontrolling
Interest
Dollars and Shares in Millions
Shares
 
Par Value
 
Shares
 
Cost
 
Balance at January 1, 2013
2,208

 
$
221

 
$
2,694

 
$
32,733

 
570

 
$
(18,823
)
 
$
15

Net earnings

 

 

 
1,145

 

 

 
21

Cash dividends declared

 

 

 
(1,163
)
 

 

 

Stock repurchase program

 

 

 

 
10

 
(364
)
 

Employee stock compensation plans

 

 
(719
)
 

 
(18
)
 
1,167

 

Distributions

 

 

 

 

 

 
(34
)
Balance at June 30, 2013
2,208

 
$
221

 
$
1,975

 
$
32,715

 
562

 
$
(18,020
)
 
$
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2014
2,208

 
$
221

 
$
1,922

 
$
32,952

 
559

 
$
(17,800
)
 
$
82

Net earnings

 

 

 
1,270

 

 

 
1

Cash dividends declared

 

 

 
(1,196
)
 

 

 

Employee stock compensation plans

 

 
(427
)
 

 
(8
)
 
591

 

Debt conversion

 

 
(16
)
 

 
(1
)
 
35

 

Distributions

 

 

 

 

 

 
(31
)
Balance at June 30, 2014
2,208

 
$
221

 
$
1,479

 
$
33,026

 
550

 
$
(17,174
)
 
$
52




The components of other comprehensive income/(loss) were as follows:
 
2014
 
2013
 
Pretax
 
Tax
 
After tax
 
Pretax
 
Tax
 
After tax
Three months ended June 30,
 
 
 
 
 
 
 
 
 
 
 
Derivatives qualifying as cash flow hedges:(a)
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains/(losses)
$
(14
)
 
$
4

 
$
(10
)
 
$
30

 
$
(10
)
 
$
20

Reclassified to net earnings
7

 
(2
)
 
5

 
(34
)
 
11

 
(23
)
Derivatives qualifying as cash flow hedges
(7
)
 
2

 
(5
)
 
(4
)
 
1

 
(3
)
Pension and postretirement benefits:
 
 
 
 
 
 
 
 
 
 
 
Actuarial gains/(losses)
(49
)
 
13

 
(36
)
 
935

 
(330
)
 
605

Amortization(b)
27

 
(6
)
 
21

 
38

 
(12
)
 
26

Settlements(c)
45

 
(17
)
 
28

 
101

 
(35
)
 
66

Pension and postretirement benefits
23

 
(10
)
 
13

 
1,074

 
(377
)
 
697

Available for sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains/(losses)
25

 
(11
)
 
14

 
(54
)
 
9

 
(45
)
Realized gains
(1
)
 

 
(1
)
 
(8
)
 
3

 
(5
)
Available for sale securities
24

 
(11
)
 
13

 
(62
)
 
12

 
(50
)
Foreign currency translation
21

 

 
21

 
(33
)
 

 
(33
)
 
$
61

 
$
(19
)
 
$
42

 
$
975

 
$
(364
)
 
$
611

 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30,
 
 
 
 
 
 
 
 
 
 
 
Derivatives qualifying as cash flow hedges:(a)
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains/(losses)
$
(19
)
 
$
6

 
$
(13
)
 
$
99

 
$
(33
)
 
$
66

Reclassified to net earnings
5

 

 
5

 
(44
)
 
16

 
(28
)
Derivatives qualifying as cash flow hedges
(14
)
 
6

 
(8
)
 
55

 
(17
)
 
38

Pension and postretirement benefits:
 
 
 
 
 
 
 
 
 
 
 
Actuarial gains/(losses)
(299
)
 
103

 
(196
)
 
935

 
(330
)
 
605

Amortization(b)
53

 
(19
)
 
34

 
76

 
(23
)
 
53

Curtailments and settlements(c)
99

 
(38
)
 
61

 
101

 
(35
)
 
66

Pension and postretirement benefits
(147
)
 
46

 
(101
)
 
1,112

 
(388
)
 
724

Available for sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains/(losses)
29

 
(13
)
 
16

 
(51
)
 
10

 
(41
)
Realized gains
(1
)
 

 
(1
)
 
(8
)
 
3

 
(5
)
Available for sale securities
28

 
(13
)
 
15

 
(59
)
 
13

 
(46
)
Foreign currency translation
10

 

 
10

 
(34
)
 

 
(34
)
 
$
(123
)
 
$
39

 
$
(84
)
 
$
1,074

 
$
(392
)
 
$
682


(a)
Reclassifications to net earnings of derivatives qualifying as effective hedges are recognized in cost of products sold.
(b)
Actuarial losses and prior service cost are amortized into cost of products sold, research and development, and marketing, selling and administrative expenses as appropriate.
(c)
Pension curtailments and settlements are recognized in other (income)/expense.

The accumulated balances related to each component of other comprehensive loss, net of taxes, were as follows:
Dollars in Millions
June 30,
2014
 
December 31, 2013
Derivatives qualifying as cash flow hedges
$
8

 
$
16

Pension and other postretirement benefits
(1,958
)
 
(1,857
)
Available for sale securities
43

 
28

Foreign currency translation
(318
)
 
(328
)
Accumulated other comprehensive loss
$
(2,225
)
 
$
(2,141
)
PENSION AND POSTRETIREMENT BENEFIT PLANS
Pension and Other Postretirement Benefits [Text Block]
PENSION AND POSTRETIREMENT BENEFIT PLANS

The net periodic benefit cost/(credit) of defined benefit pension and postretirement benefit plans includes:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Pension Benefits
 
Other Benefits
 
Pension Benefits
 
Other Benefits
Dollars in Millions
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Service cost – benefits earned during the year
$
10

 
$
9

 
$
1

 
$
2

 
$
20

 
$
19

 
$
2

 
$
3

Interest cost on projected benefit obligation
77

 
75

 
4

 
4

 
155

 
149

 
7

 
7

Expected return on plan assets
(133
)
 
(131
)
 
(7
)
 
(7
)
 
(264
)
 
(263
)
 
(14
)
 
(13
)
Amortization of prior service credits
(1
)
 
(1
)
 
(1
)
 
(1
)
 
(2
)
 
(2
)
 
(1
)
 
(1
)
Amortization of net actuarial loss
29

 
37

 

 

 
56

 
75

 

 

Curtailments and settlements
45

 
101

 

 

 
99

 
101

 
(3
)
 

Special termination benefits

 

 

 

 
13

 

 

 

Net periodic cost/(credit)
$
27

 
$
90

 
$
(3
)
 
$
(2
)
 
$
77

 
$
79

 
$
(9
)
 
$
(4
)


Pension settlement charges were recognized after determining that the annual lump sum payments will likely exceed the annual interest and service costs for certain pension plans, including the primary U.S. pension plan. The charges included the acceleration of a portion of unrecognized actuarial losses. The applicable pension benefit obligation and pension plan assets were remeasured as of June 30, 2014 resulting in a decrease to other assets and a corresponding increase in accumulated other comprehensive loss of $299 million. The changes resulted from a lower weighted average discount rate assumed in remeasuring the pension benefit obligations (4.0% at June 30, 2014 and 4.6% at December 31, 2013) partially offset by higher actual return on plan assets than expected. Contributions to the pension plans are expected to approximate $120 million during 2014, of which $83 million were incurred in the six months ended June 30, 2014.

The expense attributed to defined contribution plans in the U.S. was $46 million and $43 million for the three months ended June 30, 2014 and 2013, respectively, and $96 million and $90 million for the six months ended June 30, 2014, and 2013, respectively.
EMPLOYEE STOCK BENEFIT PLANS
Employee Stock Benefit Plans [Text Block]
EMPLOYEE STOCK BENEFIT PLANS

 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Stock options
$

 
$
1

 
$

 
$
1

Restricted stock
19

 
19

 
38

 
37

Market share units
8

 
8

 
17

 
16

Performance share units
23

 
18

 
44

 
41

Total stock-based compensation expense
$
50

 
$
46

 
$
99

 
$
95

 
 
 
 
 
 
 
 
Income tax benefit
$
17

 
$
18

 
$
33

 
$
34



In the six months ended June 30, 2014, 1.7 million restricted stock units, 0.9 million market share units and 2.3 million performance share units were granted. The weighted-average grant date fair value was $52.58 for restricted stock units, $55.44 for market share units and $55.17 for performance share units granted during the six months ended June 30, 2014.

Substantially all restricted stock units vest ratably over a four year period. Market share units vest ratably over a four year period and the number of shares ultimately issued is based on share price performance. The fair value of market share units considers the probability of satisfying market conditions. The number of shares issued when performance share units vest is determined based on the achievement of annual performance goals. The number of shares issued for 2014-2016 performance share unit awards are also adjusted based on the Company's three-year total shareholder return relative to a peer group of companies. Performance share units vest at the end of the three -year performance period.

Unrecognized compensation cost related to nonvested awards of $367 million is expected to be recognized over a weighted-average period of 2.6 years.
LEGAL PROCEEDINGS AND CONTINGENCIES
Legal Proceedings and Contingencies [Text Block]
LEGAL PROCEEDINGS AND CONTINGENCIES
The Company and certain of its subsidiaries are involved in various lawsuits, claims, government investigations and other legal proceedings that arise in the ordinary course of business. The Company recognizes accruals for such contingencies when it is probable that a liability will be incurred and the amount of loss can be reasonably estimated. These matters involve patent infringement, antitrust, securities, pricing, sales and marketing practices, environmental, commercial, health and safety matters, consumer fraud, employment matters, product liability and insurance coverage. Legal proceedings that are material or that the Company believes could become material are described below.
Although the Company believes it has substantial defenses in these matters, there can be no assurance that there will not be an increase in the scope of pending matters or that any future lawsuits, claims, government investigations or other legal proceedings will not be material. Unless otherwise noted, the Company is unable to assess the outcome of the respective litigation nor is it able to provide an estimated range of potential loss. Furthermore, failure to enforce our patent rights would likely result in substantial decreases in the respective product revenues from generic competition.
INTELLECTUAL PROPERTY
Atripla*
In April 2009, Teva Pharmaceutical Industries Ltd. (Teva) filed an abbreviated New Drug Application (aNDA) to manufacture and market a generic version of Atripla*. Atripla* is a single tablet three-drug regimen combining the Company’s Sustiva (efavirenz) and Gilead’s Truvada* (emtricitabine and tenofovir disproxil fumarate). As of this time, the Company’s U.S. patent rights covering Sustiva’s method of use has not been challenged. The composition of matter expired in November 2013. Teva sent Gilead a Paragraph IV certification letter challenging two of the fifteen Orange Book-listed patents for Atripla*. In May 2009, Gilead filed a patent infringement action against Teva in the U.S. District Court for the Southern District of New York (SDNY). In January 2010, the Company received a notice that Teva amended its aNDA and was challenging eight additional Orange Book-listed patents for Atripla*. In March 2010, the Company and Merck, Sharp & Dohme Corp. (Merck) filed a patent infringement action against Teva also in the SDNY relating to two U.S. patents which claim crystalline or polymorph forms of efavirenz. In August 2013, the Company, Merck and Teva reached a settlement relating to the two efavirenz polymorph patents and the case has been dismissed. In March 2010, Gilead filed two patent infringement actions against Teva in the SDNY relating to six Orange Book-listed patents for Atripla* and in April 2013, Gilead and Teva reached an agreement to settle the lawsuit on the patents covering tenofovir disoproxil fumarate. In February 2014, Gilead and Teva reached a settlement in principle to settle the ongoing litigation concerning the emtricitabine patents covering Atripla* and Truvada*.
Baraclude
In August 2010, Teva filed an aNDA to manufacture and market generic versions of Baraclude. The Company received a Paragraph IV certification letter from Teva challenging the one Orange Book-listed patent for Baraclude, U.S. Patent No. 5,206,244 (the ‘244 Patent), covering the entecavir molecule. In September 2010, the Company filed a patent infringement lawsuit in the U.S. District Court for the District of Delaware (Delaware District Court) against Teva for infringement. In February 2013, the Delaware District Court ruled against the Company and invalidated the ‘244 Patent. The Company has appealed the Delaware District Court’s decision and in June 2014 the U.S. Court of Appeals for the Federal Circuit (Federal Court of Appeals) denied the Company's appeal. In July 2014, the Company filed a petition for an en banc rehearing by the entire Federal Court of Appeals. Teva has tentative approval from the FDA for its generic version of entecavir. There could be a rapid and significant negative impact on U.S. net product sales of Baraclude in 2014. U.S. net product sales of Baraclude were $289 million in 2013.
Baraclude — South Korea

In 2013, Daewoong Pharmaceutical Co. Ltd. and Hanmi Pharmaceuticals Co., Ltd. initiated separate invalidity actions in the Korean Intellectual Property Office (KIPO) against Korean Patent No. 160,523 (the ‘523 patent).  The ‘523 patent expires in October 2015 and is the Korean equivalent of the ‘244 Patent, the U.S. composition of matter patent.  The invalidity actions have been consolidated and are pending. We are likely to receive a decision in 2014.  There is a risk that a decision invalidating the patent will encourage generic companies to launch generic versions of Baraclude prior to October 2015. Net product sales of Baraclude in South Korea were $158 million in 2013.
Plavix* — Australia
As previously disclosed, Sanofi was notified that, in August 2007, GenRx Proprietary Limited (GenRx) obtained regulatory approval of an application for clopidogrel bisulfate 75mg tablets in Australia. GenRx, formerly a subsidiary of Apotex Inc. (Apotex), has since changed its name to Apotex. In August 2007, Apotex filed an application in the Federal Court of Australia (the Federal Court) seeking revocation of Sanofi’s Australian Patent No. 597784 (Case No. NSD 1639 of 2007). Sanofi filed counterclaims of infringement and sought an injunction. On September 21, 2007, the Federal Court granted Sanofi’s injunction. A subsidiary of the Company was subsequently added as a party to the proceedings. In February 2008, a second company, Spirit Pharmaceuticals Pty. Ltd., also filed a revocation suit against the same patent. This case was consolidated with the Apotex case and a trial occurred in April 2008. On August 12, 2008, the Federal Court of Australia held that claims of Patent No. 597784 covering clopidogrel bisulfate, hydrochloride, hydrobromide, and taurocholate salts were valid. The Federal Court also held that the process claims, pharmaceutical composition claims, and claim directed to clopidogrel and its pharmaceutically acceptable salts were invalid. The Company and Sanofi filed notices of appeal in the Full Court of the Federal Court of Australia (Full Court) appealing the holding of invalidity of the claim covering clopidogrel and its pharmaceutically acceptable salts, process claims, and pharmaceutical composition claims which have stayed the Federal Court’s ruling. Apotex filed a notice of appeal appealing the holding of validity of the clopidogrel bisulfate, hydrochloride, hydrobromide, and taurocholate claims. A hearing on the appeals occurred in February 2009. On September 29, 2009, the Full Court held all of the claims of Patent No. 597784 invalid. In November 2009, the Company and Sanofi applied to the High Court of Australia (High Court) for special leave to appeal the judgment of the Full Court. In March 2010, the High Court denied the Company and Sanofi’s request to hear the appeal of the Full Court decision. The case has been remanded to the Federal Court for further proceedings related to damages sought by Apotex.  The Australian government has intervened in this matter and is also seeking damages for alleged losses experienced during the period when the injunction was in place. It is not possible at this time to predict the outcome of the Australian government’s claim or its impact on the Company.

Plavix* — Canada (Apotex, Inc.)
On April 22, 2009, Apotex filed an impeachment action against Sanofi in the Federal Court of Canada alleging that Sanofi’s Canadian Patent No. 1,336,777 (the ‘777 Patent) is invalid. On June 8, 2009, Sanofi filed its defense to the impeachment action and filed a suit against Apotex for infringement of the ‘777 Patent. The trial was completed in June 2011 and in December 2011, the Federal Court of Canada issued a decision that the ‘777 Patent is invalid. In July 2013, the Federal Court of Appeal reversed the Federal Court of Canada's decision and upheld the validity of the '777 Patent. The case was remanded to the Federal Court of Canada to consider the damages owed to the Company by Apotex for the infringement of the ‘777 patent. In September 2013, Apotex sought leave to appeal the decision of the Federal Court of Appeal to the Supreme Court of Canada and the Supreme Court of Canada is scheduled to hear the case in November 2014.
GENERAL COMMERCIAL LITIGATION
Remaining Apotex Matters Related to Plavix*
As previously disclosed, in November 2008, Apotex filed a lawsuit in New Jersey Superior Court against the Company and Sanofi, seeking payment of $60 million, plus interest calculated at the rate of 1% per month, related to the break-up of a March 2006 proposed settlement agreement relating to the-then pending Plavix* patent litigation against Apotex. In April 2011, the New Jersey Superior Court granted the Company’s cross-motion for summary judgment and denied Apotex’s motion for summary judgment. Apotex appealed these decisions and the New Jersey Appellate Division reversed the grant of summary judgments remanding the case back to the Superior Court for additional proceedings. The parties have agreed to resolve this matter through binding arbitration, which took place in March 2014. In the second quarter of 2014, the arbitration panel issued a decision with no liability to the Company. This concludes the matter.
In January 2011, Apotex filed a lawsuit in Florida State Court, Broward County, alleging breach of contract relating to the May 2006 proposed settlement agreement with Apotex relating to the then pending Plavix* patent litigation. A trial was held in March 2013 and a jury verdict was delivered in favor of the Company. Apotex has appealed this decision.
PRICING, SALES AND PROMOTIONAL PRACTICES LITIGATION AND INVESTIGATIONS
Abilify* Federal Subpoena
In January 2012, the Company received a subpoena from the United States Attorney’s Office for the SDNY requesting information related to, among other things, the sales and marketing of Abilify*. It is not possible at this time to assess the outcome of this matter or its potential impact on the Company.
Abilify* State Attorneys General Investigation
In March 2009, the Company received a letter from the Delaware Attorney General’s Office advising of a multi-state coalition investigating whether certain Abilify* marketing practices violated those respective states’ consumer protection statutes. The Company has entered into a tolling agreement with the states. It is not possible at this time to reasonably assess the outcome of this investigation or its potential impact on the Company.
AWP Litigation
As previously disclosed, the Company, together with a number of other pharmaceutical manufacturers, has been a defendant in a number of private class actions as well as suits brought by the attorneys general of various states. In these actions, plaintiffs allege that defendants caused the Average Wholesale Prices (AWPs) of their products to be inflated, thereby injuring government programs, entities and persons who reimbursed prescription drugs based on AWPs. The Company remains a defendant in two state attorneys general suits pending in state courts in Pennsylvania and Wisconsin. Beginning in August 2010, the Company was the defendant in a trial in the Commonwealth Court of Pennsylvania (Commonwealth Court), brought by the Commonwealth of Pennsylvania. In September 2010, the jury issued a verdict for the Company, finding that the Company was not liable for fraudulent or negligent misrepresentation; however, the Commonwealth Court judge issued a decision on a Pennsylvania consumer protection claim that did not go to the jury, finding the Company liable for $28 million and enjoining the Company from contributing to the provision of inflated AWPs. The Company appealed the decision to the Pennsylvania Supreme Court and oral argument took place in May 2013. In June 2014, the Pennsylvania Supreme Court vacated the Commonwealth judge's decision and remanded the matter back to the Commonwealth Court.
Qui Tam Litigation
In March 2011, the Company was served with an unsealed qui tam complaint filed by three former sales representatives in California Superior Court, County of Los Angeles. The California Department of Insurance has elected to intervene in the lawsuit. The complaint alleges the Company paid kickbacks to California providers and pharmacies in violation of California Insurance Frauds Prevention Act, Cal. Ins. Code § 1871.7. It is not possible at this time to reasonably assess the outcome of this lawsuit or its impact on the Company.
PRODUCT LIABILITY LITIGATION
The Company is a party to various product liability lawsuits. As previously disclosed, in addition to lawsuits, the Company also faces unfiled claims involving its products.
Plavix*
As previously disclosed, the Company and certain affiliates of Sanofi are defendants in a number of individual lawsuits in various state and federal courts claiming personal injury damage allegedly sustained after using Plavix*. Currently, over 6,300 claims involving injury plaintiffs as well as claims by spouses and/or other beneficiaries, are filed in state and federal courts in various states including California, Illinois, New Jersey, Delaware and New York. In February 2013, the Judicial Panel on Multidistrict Litigation granted the Company and Sanofi’s motion to establish a multidistrict litigation to coordinate Federal pretrial proceedings in Plavix* product liability and related cases in New Jersey Federal Court. It is not possible at this time to reasonably assess the outcome of these lawsuits or the potential impact on the Company.
Reglan*
The Company is one of a number of defendants in numerous lawsuits, on behalf of approximately 3,000 plaintiffs, including injury plaintiffs claiming personal injury allegedly sustained after using Reglan* or another brand of the generic drug metoclopramide, a product indicated for gastroesophageal reflux and certain other gastrointestinal disorders, as well as claims by spouses and/or other beneficiaries. The Company, through its generic subsidiary, Apothecon, Inc., distributed metoclopramide tablets manufactured by another party between 1996 and 2000. It is not possible at this time to reasonably assess the outcome of these lawsuits. The resolution of these pending lawsuits, however, is not expected to have a material impact on the Company.
Byetta*
Amylin, a former subsidiary of the Company, and Lilly are co-defendants in product liability litigation related to Byetta*. To date, there are over 350 separate lawsuits pending on behalf of over 1,500 plaintiffs, which include injury plaintiffs as well as claims by spouses and/or other beneficiaries, in various courts in the U.S. The Company has agreed in principle to resolve over 510 of these claims. The majority of these cases have been brought by individuals who allege personal injury sustained after using Byetta*, primarily pancreatic cancer and pancreatitis, and, in some cases, claiming alleged wrongful death. The majority of cases are pending in Federal Court in San Diego in a recently established multidistrict litigation, with the next largest contingent of cases pending in a coordinated proceeding in California Superior Court in Los Angeles. Amylin has product liability insurance covering a substantial number of claims involving Byetta* and any additional liability to Amylin with respect to Byetta* is expected to be shared between the Company and AstraZeneca. It is not possible to reasonably predict the outcome of any lawsuit, claim or proceeding or the potential impact on the Company. 
ENVIRONMENTAL PROCEEDINGS
As previously reported, the Company is a party to several environmental proceedings and other matters, and is responsible under various state, federal and foreign laws, including the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), for certain costs of investigating and/or remediating contamination resulting from past industrial activity at the Company’s current or former sites or at waste disposal or reprocessing facilities operated by third-parties.
CERCLA Matters
With respect to CERCLA matters for which the Company is responsible under various state, federal and foreign laws, the Company typically estimates potential costs based on information obtained from the U.S. Environmental Protection Agency, or counterpart state or foreign agency and/or studies prepared by independent consultants, including the total estimated costs for the site and the expected cost-sharing, if any, with other “potentially responsible parties,” and the Company accrues liabilities when they are probable and reasonably estimable. The Company estimated its share of future costs for these sites to be $64 million at June 30, 2014, which represents the sum of best estimates or, where no best estimate can reasonably be made, estimates of the minimal probable amount among a range of such costs (without taking into account any potential recoveries from other parties).
New Brunswick Facility—Environmental & Personal Injury Lawsuits
Since May 2008, over 300 lawsuits have been filed against the Company in New Jersey Superior Court by or on behalf of current and former residents of New Brunswick, New Jersey who live or have lived adjacent to the Company’s New Brunswick facility. The complaints allege various personal injuries resulting from environmental contamination at the New Brunswick facility and historical operations at that site, or are claims for medical monitoring. A portion of these complaints also assert claims for alleged property damage. In October 2008, the New Jersey Supreme Court granted Mass Tort status to these cases and transferred them to the New Jersey Superior Court in Atlantic County for centralized case management purposes. Since October 2011, over 200 additional cases have been filed in New Jersey Superior Court and removed by the Company to United States District Court, District of New Jersey. Accordingly, there are in excess of 500 cases between the state and federal court actions. In June 2014, the Company and the plaintiffs agreed to a settlement in principle, subject to finalization.
North Brunswick Township Board of Education
As previously disclosed, in October 2003, the Company was contacted by counsel representing the North Brunswick, NJ Board of Education (BOE) regarding a site where waste materials from E.R. Squibb and Sons may have been disposed from the 1940’s through the 1960’s. Fill material containing industrial waste and heavy metals in excess of residential standards was discovered during an expansion project at the North Brunswick Township High School, as well as at a number of neighboring residential properties and adjacent public park areas. In January 2004, the New Jersey Department of Environmental Protection (NJDEP) sent the Company and others an information request letter about possible waste disposal at the site, to which the Company responded in March 2004. The BOE and the Township, as the current owners of the school property and the park, are conducting and jointly financing soil remediation work and ground water investigation work under a work plan approved by the NJDEP, and have asked the Company to contribute to the cost. The Company is actively monitoring the clean-up project, including its costs. To date, neither the school board nor the Township has asserted any claim against the Company. Instead, the Company and the local entities have negotiated an agreement to attempt to resolve the matter by informal means, and avoid litigation. A central component of the agreement is the provision by the Company of interim funding to help defray cleanup costs and assure the work is not interrupted. The Company transmitted interim funding payments in December 2007 and November 2009. The parties commenced mediation in late 2008; however, those efforts were not successful and the parties moved to a binding allocation process. The parties are expected to conduct fact and expert discovery, followed by formal evidentiary hearings and written argument. Hearings are scheduled to commence in March 2015. In addition, in September 2009, the Township and BOE filed suits against several other parties alleged to have contributed waste materials to the site; that litigation has now been settled by the parties. The Company does not currently believe that it is responsible for any additional amounts beyond the two interim payments totaling $4 million already transmitted. Any additional possible loss is not expected to be material.
OTHER PROCEEDINGS
SEC Germany Investigation
In October 2006, the SEC informed the Company that it had begun a formal inquiry into the activities of certain of the Company’s German pharmaceutical subsidiaries and its employees and/or agents.  The SEC’s inquiry encompasses matters formerly under investigation by the German prosecutor in Munich, Germany, which have since been resolved. The Company understands the inquiry concerns potential violations of the Foreign Corrupt Practices Act (FCPA). The Company has been cooperating with the SEC.
FCPA Investigation
In March 2012, the Company received a subpoena from the SEC issued in connection with its investigation under the FCPA, primarily relating to sales and marketing practices in various countries. The Company is cooperating with the SEC, along with the Department of Justice, in its investigation of these matters. In particular, the Company is investigating certain sales and marketing practices in China. It is not possible at this time to assess the outcome of these matters or their potential impact on the Company.
BASIS OF PRESENTATION (Policies)
New Accounting Pronouncements, Policy [Policy Text Block]
In April 2014, the Financial Accounting Standards Board (FASB) issued amended guidance on the use and presentation of discontinued operations in an entity's consolidated financial statements. The new guidance restricts the presentation of discontinued operations to business circumstances when the disposal of business operations represents a strategic shift that has or will have a major effect on an entity's operations and financial results. The guidance becomes effective on January 1, 2015. Adoption is on a prospective basis.

In May 2014, the FASB issued a new standard related to revenue recognition, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The new standard will replace most of the existing revenue recognition standards in U.S. GAAP when it becomes effective on January 1, 2017. Early adoption is not permitted. The new standard can be applied retrospectively to each prior reporting period presented or retrospectively with the cumulative effect of the change recognized at the date of the initial application. The Company is assessing the potential impact of the new standard on financial reporting and has not yet selected a transition method.
BUSINESS SEGMENT INFORMATION (Tables)
Revenues by Products [Table Text Block]

Product revenues were as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Virology
 
 
 
 
 
 
 
Baraclude (entecavir)
$
369

 
$
371

 
$
775

 
$
737

Reyataz (atazanavir sulfate)
362

 
431

 
706

 
792

Sustiva (efavirenz) Franchise(a)
361

 
411

 
680

 
798

Oncology
 
 
 
 
 
 
 
Erbitux* (cetuximab)
186

 
171

 
355

 
333

Sprycel (dasatinib)
368

 
312

 
710

 
599

Yervoy (ipilimumab)
321

 
233

 
592

 
462

Neuroscience
 
 
 
 
 
 
 
Abilify* (aripiprazole)(b)
555

 
563

 
1,095

 
1,085

Immunoscience
 
 
 
 
 
 
 
Orencia (abatacept)
402

 
352

 
765

 
672

Cardiovascular
 
 
 
 
 
 
 
Eliquis (apixaban)
171

 
12

 
277

 
34

Diabetes Alliance(c)
27

 
438

 
206

 
796

Mature Products and All Other(d)
767

 
754

 
1,539

 
1,571

Total Revenues
$
3,889

 
$
4,048

 
$
7,700

 
$
7,879

*
Indicates brand names of products which are trademarks not owned or wholly owned by BMS. Specific trademark ownership information can be found at the end of this quarterly report on Form 10-Q.
(a)
Includes alliance and other revenue of $313 million and $346 million for three months ended June 30, 2014 and 2013, respectively, and $585 million and $670 million for the six months ended June 30, 2014 and 2013, respectively.
(b)
Includes alliance and other revenue of $499 million and $454 million for three months ended June 30, 2014 and 2013, respectively, and $940 million and $849 million for the six months ended June 30, 2014 and 2013, respectively.
(c)
Includes Bydureon* (exenatide extended-release for injectable suspension), Byetta* (exenatide), Farxiga*/Xigduo* (dapagliflozin/dapagliflozin and metformin hydrochloride), Onglyza*/Kombiglyze* (saxagliptin/saxagliptin and metformin), Myalept* (metreleptin) and Symlin* (pramlintide acetate).
(d)
Includes Plavix* (clopidogrel bisulfate) revenues of $45 million and $44 million for the three months ended June 30, 2014 and 2013, respectively, and $93 million and $135 million for the six months ended June 30, 2014 and 2013, respectively. Additionally, includes Avapro*/Avalide* (irbesartan/irbesartan-hydrochlorothiazide) revenues of $59 million and $56 million for the three months ended June 30, 2014 and 2013, respectively, and $115 million and $102 million for the six months ended June 30, 2014 and 2013, respectively.
ALLIANCES AND COLLABORATIONS (Tables)
Selected financial information pertaining to our alliances was as follows, including net product sales when BMS is the principal in the third-party customer sale for products subject to the alliance. Expenses summarized below do not include all amounts attributed to the activities for the products in the alliance, but only the payments between the alliance partners or the related amortization if the payments were deferred or capitalized.
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Revenues from alliances:
 
 
 
 
 
 
 
Net product sales
$
782

 
$
1,054

 
$
1,677

 
$
2,077

Alliance and other revenues
1,039

 
958

 
1,951

 
1,767

Total Revenues
1,821

 
2,012

 
3,628

 
3,844

 
 
 
 
 
 
 
 
Payments to/(from) alliance partners:
 
 
 
 
 
 
 
Cost of products sold
323

 
338

 
678

 
627

Marketing, selling and administrative
6

 
(27
)
 
3

 
(69
)
Advertising and product promotion
32

 
(7
)
 
67

 
(22
)
Research and development
(4
)
 
(31
)
 
(35
)
 
(55
)
Other (income)/expense
(158
)
 
(100
)
 
(553
)
 
(172
)
 
 
 
 
 
 
 
 
Net earnings/(losses) attributable to noncontrolling interest, pre-tax
7

 
(1
)
 
11

 
23


Selected Alliance Balance Sheet information:
 
 
 
Dollars in Millions
June 30,
2014
 
December 31,
2013
Receivables - from alliance partners
$
1,033

 
$
1,122

Accounts payable - to alliance partners
1,552

 
1,396

Deferred income from alliances(a)
1,958

 
5,089


(a)
Included deferred income classified as liabilities related to assets held-for-sale of $3,671 million at December 31, 2013.
Royalty rates on net sales are as follows:
 
2014
2015
2016
2017 - 2025
Onglyza* and Farxiga* Worldwide Net Sales up to $500 million
44
%
35
%
27
%
12-25%
Onglyza* and Farxiga* Worldwide Net Sales over $500 million
3
%
7
%
9
%
12-25%
Amylin products U.S. Net Sales

2
%
2
%
5-12%
Summarized financial information related to the AstraZeneca alliances was as follows:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Revenues from AstraZeneca alliances:
 
 
 
 
 
 
 
Net product sales
$
2

 
$
431

 
$
161

 
$
786

Alliance and other revenues
26

 
5

 
45

 
9

Total Revenues
28

 
436

 
206

 
795

 
 
 
 
 
 
 
 
Payments to/(from) AstraZeneca:
 
 
 
 
 
 
 
Cost of products sold:
 
 
 
 
 
 
 
Profit sharing
1

 
178

 
77

 
324

Amortization of deferred income

 
(74
)
 

 
(149
)
 
 
 
 
 
 
 
 
Cost reimbursements to/(from) AstraZeneca recognized in:
 
 
 
 
 
 
 
Cost products sold

 
(6
)
 
(9
)
 
(9
)
Marketing, selling and administrative
4

 
(34
)
 
(7
)
 
(71
)
Advertising and product promotion
(1
)
 
(7
)
 
(4
)
 
(18
)
Research and development
(2
)
 
(21
)
 
(9
)
 
(43
)
 
 
 
 
 
 
 
 
Other (income)/expense:
 
 
 
 
 
 
 
Amortization of deferred income
(21
)
 
(8
)
 
(34
)
 
(15
)
Provision for restructuring

 
(20
)
 
(2
)
 
(25
)
Royalties
(90
)
 

 
(138
)
 

Transitional services
(34
)
 

 
(65
)
 

Gain on sale of business
12

 

 
(247
)
 

 
 
 
 
 
 
 
 
Selected Alliance Cash Flow information:
 
 
 
 
 
 
 
Deferred income
14

 

 
289

 
80

Proceeds from sale of business
99

 

 
3,154

 

Other investing activities
53

 

 
53

 

Selected Alliance Balance Sheet information:
 
 
 
Dollars in Millions
June 30,
2014
 
December 31,
2013
Deferred income attributed to:
 
 
 
Non-refundable upfront, milestone and other licensing receipts(a)
$

 
$
3,671

Assets not yet transferred to AstraZeneca
369

 

Services not yet performed for AstraZeneca
260

 


(a)
Included in liabilities related to assets held-for-sale at December 31, 2013.
ASSETS HELD-FOR-SALE (Tables)
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

The following assets and liabilities of the diabetes business held-for-sale were presented separately from BMS’s other accounts:
Dollars in Millions
 
December 31, 2013
Assets
 
 
Receivables
 
$
83

Inventories
 
163

Deferred income taxes - current
 
125

Prepaid expenses and other
 
20

Property, plant and equipment
 
678

Goodwill
 
550

Other intangible assets
 
5,682

Other assets
 
119

Total assets held-for-sale
 
7,420

 
 
 
Liabilities
 
 
Short-term borrowings and current portion of long-term debt
 
27

Accounts payable
 
30

Accrued expenses
 
148

Deferred income - current
 
352

Accrued rebates and returns
 
81

Deferred income - noncurrent
 
3,319

Deferred income taxes - noncurrent
 
946

Other liabilities
 
28

Total liabilities related to assets held-for-sale
 
$
4,931

OTHER (INCOME)/EXPENSE (Tables)
Schedule Of Other Income Expense [Table Text Block]
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Interest expense
$
46

 
$
50

 
$
100

 
$
100

Investment income
(28
)
 
(28
)
 
(51
)
 
(53
)
Provision for restructuring
16

 
173

 
37

 
206

Litigation charges/(recoveries)
(20
)
 
(22
)
 
9

 
(22
)
Equity in net income of affiliates
(33
)
 
(50
)
 
(69
)
 
(86
)
Gain on sale of product lines, businesses and assets
7

 

 
(252
)
 
(1
)
Other alliance and licensing income
(144
)
 
(32
)
 
(252
)
 
(89
)
Pension curtailments, settlements and special termination benefits
45

 
101

 
109

 
101

Other
7

 
7

 
57

 
24

Other (income)/expense
$
(104
)
 
$
199

 
$
(312
)
 
$
180

RESTRUCTURING (Tables)
The following is the provision for restructuring:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Employee termination benefits
$
14

 
$
172

 
$
34

 
$
201

Other exit costs
2

 
1

 
3

 
5

Provision for restructuring
$
16

 
$
173

 
$
37

 
$
206

The following table represents the activity of employee termination and other exit cost liabilities:
Dollars in Millions
2014
 
2013
Liability at January 1
$
102

 
$
167

Charges
40

 
209

Changes in estimates
(3
)
 
(3
)
Provision for restructuring
37

 
206

Foreign currency translation
1

 
1

Spending
(48
)
 
(130
)
Liability at June 30
$
92

 
$
244

INCOME TAXES (Tables)
Schedule Of Provision For Income Taxes [Table Text Block]
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Earnings Before Income Taxes
$
448

 
$
530

 
$
1,433

 
$
1,204

Provision for Income Taxes
114

 

 
163

 
51

Effective tax rate
25.4
%
 

 
11.4
%
 
4.2
%
EARNINGS PER SHARE (Tables)
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]
 
Three Months Ended June 30,
 
Six Months Ended June 30,
Amounts in Millions, Except Per Share Data
2014
 
2013
 
2014
 
2013
Net Earnings Attributable to BMS used for Basic and Diluted EPS Calculation
$
333

 
$
536

 
$
1,270

 
$
1,145

 
 
 
 
 
 
 
 
Weighted-average common shares outstanding – basic
1,657

 
1,644

 
1,655

 
1,641

Contingently convertible debt common stock equivalents
1

 
1

 
1

 
1

Incremental shares attributable to share-based compensation plans
11

 
15

 
12

 
16

Weighted-average common shares outstanding – diluted
1,669

 
1,660

 
1,668

 
1,658

 
 
 
 
 
 
 
 
Earnings per Common Share
 
 
 
 
 
 
 
Basic
$
0.20

 
$
0.33

 
$
0.77

 
$
0.70

Diluted
$
0.20

 
$
0.32

 
$
0.76

 
$
0.69

 
 
 
 
 
 
 
 
Anti-dilutive weighted-average equivalent shares – stock incentive plans

 

 

 

FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
 
June 30, 2014
 
December 31, 2013
Dollars in Millions
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Cash and cash equivalents - Money market and other securities
$

 
$
3,749

 
$

 
$
3,749

 
$

 
$
3,201

 
$

 
$
3,201

Marketable securities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Certificates of deposit

 
1,813

 

 
1,813

 

 
122

 

 
122

Commercial paper

 
200

 

 
200

 

 

 

 

Corporate debt securities

 
4,640

 

 
4,640

 

 
4,432

 

 
4,432

Equity funds

 
94

 

 
94

 

 
74

 

 
74

Fixed income funds

 
10

 

 
10

 

 
46

 

 
46

Auction Rate Securities (ARS)

 

 
12

 
12

 

 

 
12

 
12

Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swap contracts

 
111

 

 
111

 

 
64

 

 
64

Foreign currency forward contracts

 
22

 

 
22

 

 
50

 

 
50

Investments in equity of other companies
53

 

 

 
53

 

 

 

 

Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate swap contracts

 
(3
)
 

 
(3
)
 

 
(27
)
 

 
(27
)
Foreign currency forward contracts

 
(24
)
 

 
(24
)
 

 
(35
)
 

 
(35
)
Written option liabilities(a)

 

 
(198
)
 
(198
)
 

 

 
(162
)
 
(162
)
Contingent consideration liability(b)

 

 
(8
)
 
(8
)
 

 

 
(8
)
 
(8
)

(a)
Includes $69 million and $18 million in accrued expenses and $129 million and $144 million in other liabilities as of June 30, 2014 and December 31, 2013, respectively.
(b)
The contingent consideration liability is included in other liabilities.
The following table summarizes the activity for financial assets and liabilities utilizing Level 3 fair value measurements:
 
2014
 
2013
Dollars in Millions
ARS
 
Contingent consideration liability
 
Written option liabilities
 
ARS and FRS(a)
 
Contingent consideration liability
 
Written option liabilities
Fair value at January 1
$
12

 
$
(8
)
 
$
(162
)
 
$
31

 
$
(8
)
 
$
(18
)
Additions from new alliances

 

 

 

 

 
(144
)
Changes in fair value

 

 
(36
)
 

 

 

Fair value at June 30
$
12

 
$
(8
)
 
$
(198
)
 
$
31

 
$
(8
)
 
$
(162
)

(a)
FRS: Floating Rate Securities
The following table summarizes available-for-sale securities:
 
Dollars in Millions
Amortized
Cost
 
Gross
Unrealized
Gain in
Accumulated
OCI
 
Gross
Unrealized
Loss in
Accumulated
OCI
 
Fair Value
 
 
June 30, 2014
 
 
 
 
 
 
 
 
Certificates of deposit
$
1,813

 
$

 
$

 
$
1,813

 
Commercial paper
200

 

 

 
200

 
Corporate debt securities
4,592

 
51

 
(3
)
 
4,640

 
ARS
9

 
3

 

 
12

 
Investments in equity of other companies
41

 
18

 
(6
)
 
53

 
Total
$
6,655

 
$
72

 
$
(9
)
 
$
6,718

 
 
 
 
 
 
 
 
 
 
December 31, 2013
 
 
 
 
 
 
 
 
Certificates of deposit
$
122

 
$

 
$

 
$
122

 
Corporate debt securities
4,401

 
44

 
(13
)
 
4,432

 
ARS
9

 
3

 

 
12

 
Total
$
4,532

 
$
47

 
$
(13
)
 
$
4,566

The following table summarizes the fair value of outstanding derivatives:
 
 
 
June 30, 2014
 
December 31, 2013
Dollars in Millions
Balance Sheet Location
 
Notional
 
Fair Value
 
Notional
 
Fair Value
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
Interest rate swap contracts
Other assets
 
$
1,173

 
$
111

 
$
673

 
$
64

Interest rate swap contracts
Other liabilities
 
1,150

 
(3
)
 
1,950

 
(27
)
Foreign currency forward contracts
Prepaid expenses and other
 
187

 
17

 
301

 
44

Foreign currency forward contracts
Other assets
 
187

 
5

 
100

 
6

Foreign currency forward contracts
Accrued expenses
 
710

 
(22
)
 
704

 
(31
)
Foreign currency forward contracts
Other liabilities
 
109

 
(2
)
 
263

 
(4
)
Long-term debt and the current portion of long-term debt includes:
Dollars in Millions
June 30,
2014
 
December 31,
2013
Principal Value
$
6,959

 
$
7,593

Adjustments to Principal Value:
 
 
 
Fair value of interest rate swap contracts
108

 
37

Unamortized basis adjustment from interest rate swap contract terminations
365

 
442

Unamortized bond discounts
(60
)
 
(64
)
Total
$
7,372

 
$
8,008

 
 
 
 
Current portion of long-term debt(a)
$

 
$
27

Long-term debt
7,372

 
7,981



(a)
Included in liabilities related to assets held-for-sale at December 31, 2013.
The following information pertains to the outstanding 5.45% Notes due 2018 that were redeemed in February 2014:
 
Six Months Ended
Dollars in Millions
June 30, 2014
Principal amount
$
582

Carrying value
633

Debt redemption price
676

Notional amount of interest rate swap contracts terminated
500

Interest rate swap contract termination payments
(4
)
Total loss
45

RECEIVABLES (Tables)
Schedule Of Receivables [Table Text Block]

Dollars in Millions
June 30,
2014
 
December 31,
2013
Trade receivables
$
1,884

 
$
1,779

Less allowances
(85
)
 
(89
)
Net trade receivables
1,799

 
1,690

Alliance partners receivables
1,033

 
1,122

Prepaid and refundable income taxes
290

 
262

Other
193

 
286

Receivables
$
3,315

 
$
3,360

INVENTORIES (Tables)
Inventories [Table Text Block]
Dollars in Millions
June 30,
2014
 
December 31,
2013
Finished goods
$
550

 
$
491

Work in process
800

 
757

Raw and packaging materials
316

 
250

Inventories
$
1,666

 
$
1,498

PROPERTY, PLANT AND EQUIPMENT (Tables)
Property, Plant and Equipment [Table Text Block]

Dollars in Millions
June 30,
2014
 
December 31,
2013
Land
$
110

 
$
109

Buildings
4,806

 
4,748

Machinery, equipment and fixtures
3,773

 
3,699

Construction in progress
247

 
287

Gross property, plant and equipment
8,936

 
8,843

Less accumulated depreciation
(4,498
)
 
(4,264
)
Property, plant and equipment
$
4,438

 
$
4,579

OTHER INTANGIBLE ASSETS (Tables)
Schedule Of Intangible Assets By Major Class [Table Text Block]
Dollars in Millions
June 30,
2014
 
December 31,
2013
Licenses
$
1,151

 
$
1,162

Developed technology rights
2,468

 
2,486

Capitalized software
1,258

 
1,240

In-process research and development (IPRD)
205

 
548

Gross other intangible assets
5,082

 
5,436

Less accumulated amortization
(3,239
)
 
(3,118
)
Total other intangible assets
$
1,843

 
$
2,318

DEFERRED INCOME (Tables)
Deferred Revenue By Arrangement Disclosure [Table Text Block]
Dollars in Millions
June 30,
2014
 
December 31,
2013
Upfront, milestone and other licensing receipts
$
885

 
$
970

Atripla* deferred revenue
461

 
468

Gain on sale-leaseback transactions
57

 
71

Diabetes business divestiture (Undelivered elements)
629

 

Other
100

 
16

Total deferred income
$
2,132

 
$
1,525

 
 
 
 
Current portion
$
1,090

 
$
756

Non-current portion
1,042

 
769

EQUITY (Tables)
 
Common Stock
 
Capital in  Excess
of Par Value
of Stock
 
Retained
Earnings
 
Treasury Stock
 
Noncontrolling
Interest
Dollars and Shares in Millions
Shares
 
Par Value
 
Shares
 
Cost
 
Balance at January 1, 2013
2,208

 
$
221

 
$
2,694

 
$
32,733

 
570

 
$
(18,823
)
 
$
15

Net earnings

 

 

 
1,145

 

 

 
21

Cash dividends declared

 

 

 
(1,163
)
 

 

 

Stock repurchase program

 

 

 

 
10

 
(364
)
 

Employee stock compensation plans

 

 
(719
)
 

 
(18
)
 
1,167

 

Distributions

 

 

 

 

 

 
(34
)
Balance at June 30, 2013
2,208

 
$
221

 
$
1,975

 
$
32,715

 
562

 
$
(18,020
)
 
$
2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at January 1, 2014
2,208

 
$
221

 
$
1,922

 
$
32,952

 
559

 
$
(17,800
)
 
$
82

Net earnings

 

 

 
1,270

 

 

 
1

Cash dividends declared

 

 

 
(1,196
)
 

 

 

Employee stock compensation plans

 

 
(427
)
 

 
(8
)
 
591

 

Debt conversion

 

 
(16
)
 

 
(1
)
 
35

 

Distributions

 

 

 

 

 

 
(31
)
Balance at June 30, 2014
2,208

 
$
221

 
$
1,479

 
$
33,026

 
550

 
$
(17,174
)
 
$
52

The components of other comprehensive income/(loss) were as follows:
 
2014
 
2013
 
Pretax
 
Tax
 
After tax
 
Pretax
 
Tax
 
After tax
Three months ended June 30,
 
 
 
 
 
 
 
 
 
 
 
Derivatives qualifying as cash flow hedges:(a)
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains/(losses)
$
(14
)
 
$
4

 
$
(10
)
 
$
30

 
$
(10
)
 
$
20

Reclassified to net earnings
7

 
(2
)
 
5

 
(34
)
 
11

 
(23
)
Derivatives qualifying as cash flow hedges
(7
)
 
2

 
(5
)
 
(4
)
 
1

 
(3
)
Pension and postretirement benefits:
 
 
 
 
 
 
 
 
 
 
 
Actuarial gains/(losses)
(49
)
 
13

 
(36
)
 
935

 
(330
)
 
605

Amortization(b)
27

 
(6
)
 
21

 
38

 
(12
)
 
26

Settlements(c)
45

 
(17
)
 
28

 
101

 
(35
)
 
66

Pension and postretirement benefits
23

 
(10
)
 
13

 
1,074

 
(377
)
 
697

Available for sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains/(losses)
25

 
(11
)
 
14

 
(54
)
 
9

 
(45
)
Realized gains
(1
)
 

 
(1
)
 
(8
)
 
3

 
(5
)
Available for sale securities
24

 
(11
)
 
13

 
(62
)
 
12

 
(50
)
Foreign currency translation
21

 

 
21

 
(33
)
 

 
(33
)
 
$
61

 
$
(19
)
 
$
42

 
$
975

 
$
(364
)
 
$
611

 
 
 
 
 
 
 
 
 
 
 
 
Six months ended June 30,
 
 
 
 
 
 
 
 
 
 
 
Derivatives qualifying as cash flow hedges:(a)
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains/(losses)
$
(19
)
 
$
6

 
$
(13
)
 
$
99

 
$
(33
)
 
$
66

Reclassified to net earnings
5

 

 
5

 
(44
)
 
16

 
(28
)
Derivatives qualifying as cash flow hedges
(14
)
 
6

 
(8
)
 
55

 
(17
)
 
38

Pension and postretirement benefits:
 
 
 
 
 
 
 
 
 
 
 
Actuarial gains/(losses)
(299
)
 
103

 
(196
)
 
935

 
(330
)
 
605

Amortization(b)
53

 
(19
)
 
34

 
76

 
(23
)
 
53

Curtailments and settlements(c)
99

 
(38
)
 
61

 
101

 
(35
)
 
66

Pension and postretirement benefits
(147
)
 
46

 
(101
)
 
1,112

 
(388
)
 
724

Available for sale securities:
 
 
 
 
 
 
 
 
 
 
 
Unrealized gains/(losses)
29

 
(13
)
 
16

 
(51
)
 
10

 
(41
)
Realized gains
(1
)
 

 
(1
)
 
(8
)
 
3

 
(5
)
Available for sale securities
28

 
(13
)
 
15

 
(59
)
 
13

 
(46
)
Foreign currency translation
10

 

 
10

 
(34
)
 

 
(34
)
 
$
(123
)
 
$
39

 
$
(84
)
 
$
1,074

 
$
(392
)
 
$
682


(a)
Reclassifications to net earnings of derivatives qualifying as effective hedges are recognized in cost of products sold.
(b)
Actuarial losses and prior service cost are amortized into cost of products sold, research and development, and marketing, selling and administrative expenses as appropriate.
(c)
Pension curtailments and settlements are recognized in other (income)/expense.
The accumulated balances related to each component of other comprehensive loss, net of taxes, were as follows:
Dollars in Millions
June 30,
2014
 
December 31, 2013
Derivatives qualifying as cash flow hedges
$
8

 
$
16

Pension and other postretirement benefits
(1,958
)
 
(1,857
)
Available for sale securities
43

 
28

Foreign currency translation
(318
)
 
(328
)
Accumulated other comprehensive loss
$
(2,225
)
 
$
(2,141
)
PENSION AND POSTRETIREMENT BENEFIT PLANS (Tables)
Schedule of Defined Benefit Plans Disclosures [Table Text Block]
The net periodic benefit cost/(credit) of defined benefit pension and postretirement benefit plans includes:
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
Pension Benefits
 
Other Benefits
 
Pension Benefits
 
Other Benefits
Dollars in Millions
2014
 
2013
 
2014
 
2013
 
2014
 
2013
 
2014
 
2013
Service cost – benefits earned during the year
$
10

 
$
9

 
$
1

 
$
2

 
$
20

 
$
19

 
$
2

 
$
3

Interest cost on projected benefit obligation
77

 
75

 
4

 
4

 
155

 
149

 
7

 
7

Expected return on plan assets
(133
)
 
(131
)
 
(7
)
 
(7
)
 
(264
)
 
(263
)
 
(14
)
 
(13
)
Amortization of prior service credits
(1
)
 
(1
)
 
(1
)
 
(1
)
 
(2
)
 
(2
)
 
(1
)
 
(1
)
Amortization of net actuarial loss
29

 
37

 

 

 
56

 
75

 

 

Curtailments and settlements
45

 
101

 

 

 
99

 
101

 
(3
)
 

Special termination benefits

 

 

 

 
13

 

 

 

Net periodic cost/(credit)
$
27

 
$
90

 
$
(3
)
 
$
(2
)
 
$
77

 
$
79

 
$
(9
)
 
$
(4
)
EMPLOYEE STOCK BENEFIT PLANS (Tables)
Schedule Of Share Based Compensation Expense [Table Text Block]

 
Three Months Ended June 30,
 
Six Months Ended June 30,
Dollars in Millions
2014
 
2013
 
2014
 
2013
Stock options
$

 
$
1

 
$

 
$
1

Restricted stock
19

 
19

 
38

 
37

Market share units
8

 
8

 
17

 
16

Performance share units
23

 
18

 
44

 
41

Total stock-based compensation expense
$
50

 
$
46

 
$
99

 
$
95

 
 
 
 
 
 
 
 
Income tax benefit
$
17

 
$
18

 
$
33

 
$
34

BUSINESS SEGMENT INFORMATION (Net Sales of Key Products) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
$ 3,889 
$ 4,048 
$ 7,700 
$ 7,879 
Alliance and other revenues
1,119 
1,024 
2,123 
1,898 
Baraclude [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
369 
371 
775 
737 
Reyataz [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
362 
431 
706 
792 
Sustiva Franchise [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
361 
411 
680 
798 
Alliance and other revenues
313 
346 
585 
670 
Erbitux [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
186 
171 
355 
333 
Sprycel [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
368 
312 
710 
599 
Yervoy [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
321 
233 
592 
462 
Abilify [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
555 
563 
1,095 
1,085 
Alliance and other revenues
499 
454 
940 
849 
Orencia [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
402 
352 
765 
672 
Eliquis [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
171 
12 
277 
34 
Diabetes alliance [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
27 
438 
206 
796 
Mature Products And All Other [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
767 
754 
1,539 
1,571 
Plavix [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
45 
44 
93 
135 
Avapro Avalide [Member]
 
 
 
 
Segment Reporting Information [Line Items]
 
 
 
 
Total revenues
$ 59 
$ 56 
$ 115 
$ 102 
ALLIANCES AND COLLABORATIONS (Narrative) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Net product sales
$ 2,770 
$ 3,024 
$ 5,577 
$ 5,981 
 
Alliance and other revenues
1,119 
1,024 
2,123 
1,898 
 
Total revenues
3,889 
4,048 
7,700 
7,879 
 
Receivables - from alliance partners
1,033 
 
1,033 
 
1,122 
Deferred income from alliances
2,132 
 
2,132 
 
1,525 
Written Option Liability [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Fair value of the written option
198 
 
198 
 
162 
Abilify [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Alliance and other revenues
499 
454 
940 
849 
 
Total revenues
555 
563 
1,095 
1,085 
 
Eliquis [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Total revenues
171 
12 
277 
34 
 
Otsuka [Member] |
United States [Member] |
Abilify [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Percentage of net sales recognized from collaboration
33.00% 
34.00% 
33.00% 
34.00% 
 
Pfizer [Member] |
Eliquis [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Upfront, milestone and other licensing payments received
 
 
60 
 
 
Valeant [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Proceeds expected to be received from an alliance partner upon the exercise of an option to acquire the trademarks and intellectual property of certain products
 
 
60 
 
 
Charge included in other expense related to the increase in the fair value of a written option
 
 
16 
 
 
Valeant [Member] |
Written Option Liability [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Fair value of the written option
34 
 
34 
 
 
Reckitt Benckiser Group [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Charge included in other expense related to the increase in the fair value of a written option
 
 
15 
 
 
Reckitt Benckiser Group [Member] |
Written Option Liability [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Fair value of the written option
129 
 
129 
 
 
Alliance Partners [Member]
 
 
 
 
 
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
Net product sales
782 
1,054 
1,677 
2,077 
 
Alliance and other revenues
1,039 
958 
1,951 
1,767 
 
Total revenues
1,821 
2,012 
3,628 
3,844 
 
Payments to/(from) alliance partners - Cost of products sold
323 
338 
678 
627 
 
Payments to/(from) alliance partners - Marketing, selling and administrative
(27)
(69)
 
Payments to/(from) alliance partners - Advertising and product promotion
32 
(7)
67 
(22)
 
Payments to/(from) alliance partners - Research and development
(4)
(31)
(35)
(55)
 
Payments to/(from) alliance partners - Other income/expense
(158)
(100)
(553)
(172)
 
Net earnings attributable to noncontrolling interest, pre-tax
(1)
11 
23 
 
Receivables - from alliance partners
1,033 
 
1,033 
 
1,122 
Accounts payable - to alliance partners
1,552 
 
1,552 
 
1,396 
Deferred income from alliances
1,958 
 
1,958 
 
5,089 
Deferred income from alliances included in liabilities related to assets held-for-sale
 
 
 
 
$ 3,671 
ALLIANCES AND COLLABORATIONS (AstraZeneca) (Details) (USD $)
3 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 3 Months Ended 12 Months Ended 3 Months Ended 12 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2014
Dec. 31, 2013
Jun. 30, 2014
AstraZeneca [Member]
Jun. 30, 2013
AstraZeneca [Member]
Jun. 30, 2014
AstraZeneca [Member]
Jun. 30, 2013
AstraZeneca [Member]
Dec. 31, 2016
AstraZeneca [Member]
Dec. 31, 2015
AstraZeneca [Member]
Jan. 31, 2014
AstraZeneca [Member]
Dec. 31, 2013
AstraZeneca [Member]
Upfront, milestone and other licensing payments [Member]
Jun. 30, 2014
AstraZeneca [Member]
Amortization Income Expense [Member]
Jun. 30, 2013
AstraZeneca [Member]
Amortization Income Expense [Member]
Jun. 30, 2014
AstraZeneca [Member]
Amortization Income Expense [Member]
Jun. 30, 2013
AstraZeneca [Member]
Amortization Income Expense [Member]
Jun. 30, 2014
AstraZeneca [Member]
Assets Not Yet Transferred to Alliance Partner [Member]
Jun. 30, 2014
AstraZeneca [Member]
Services Not Yet Performed For Alliance Partner [Member]
Dec. 31, 2016
AstraZeneca [Member]
Amylin Related Products [Member]
Dec. 31, 2015
AstraZeneca [Member]
Amylin Related Products [Member]
Mar. 31, 2017
AstraZeneca [Member]
Amylin Related Products [Member]
Maximum [Member]
Mar. 31, 2017
AstraZeneca [Member]
Amylin Related Products [Member]
Minimum [Member]
Jun. 30, 2014
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Mar. 31, 2017
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Maximum [Member]
Dec. 31, 2016
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Maximum [Member]
Dec. 31, 2015
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Maximum [Member]
Dec. 31, 2014
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Maximum [Member]
Mar. 31, 2017
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Minimum [Member]
Dec. 31, 2016
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Minimum [Member]
Dec. 31, 2015
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Minimum [Member]
Dec. 31, 2014
AstraZeneca [Member]
Onglyza, Kombiglyze and Forxiga [Member]
Minimum [Member]
Alliances and Collaborations Statement [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of agreements in collaboration
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual limit on development agreement costs
 
 
 
 
$ 227,000,000 
 
 
 
 
 
$ 84,000,000 
$ 127,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds received at the closing of the transaction
 
 
 
 
 
 
2,700,000,000 
 
2,700,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total contingent regulatory and sales-based milestone payments to be potentially received as consideration for the sale of a business
 
 
 
 
 
 
1,400,000,000 
 
1,400,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total contingent approval milestones to be potentially received as consideration for the sale of a business
 
 
 
 
 
 
800,000,000 
 
800,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total contingent sales-based milestones to be potentially received as consideration for the sale of a business
 
 
 
 
 
 
600,000,000 
 
600,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Maximum contingent payments if and when certain assets are transferred
 
 
 
 
 
 
225,000,000 
 
225,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Royalty rate on net sales
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2.00% 
2.00% 
12.00% 
5.00% 
 
25.00% 
27.00% 
35.00% 
44.00% 
12.00% 
9.00% 
7.00% 
3.00% 
Royalty rate sales threshold - Maximum
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500,000,000 
 
 
 
 
 
 
 
 
Royalty rate sales threshold - Minimum
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
500,000,000 
 
 
 
 
 
 
 
 
Total consideration received during the period
 
 
 
 
 
 
 
 
3,600,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Contingent regulatory milestone payments received during the period
 
 
 
 
 
 
 
 
700,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portion of the proceeds received allocated to the sale of the business
 
 
 
 
 
 
 
 
2,900,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Portion of the proceeds received allocated to the undelivered elements of the sales transaction
 
 
 
 
 
 
 
 
667,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Allocation of goodwill to disposal group
 
 
 
 
 
 
 
 
600,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reversal of net deferred tax liabilities attributed to the inside tax basis of Amylin
 
 
 
 
 
 
 
 
821,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earned royalties
 
 
 
 
 
 
 
 
169,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earned royalties included in other income
144,000,000 
32,000,000 
252,000,000 
89,000,000 
 
 
 
 
138,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Earned royalties allocated to undelivered elements
 
 
 
 
 
 
 
 
31,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net product sales
2,770,000,000 
3,024,000,000 
5,577,000,000 
5,981,000,000 
 
 
2,000,000 
431,000,000 
161,000,000 
786,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Alliance and other revenues
1,119,000,000 
1,024,000,000 
2,123,000,000 
1,898,000,000 
 
 
26,000,000 
5,000,000 
45,000,000 
9,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
3,889,000,000 
4,048,000,000 
7,700,000,000 
7,879,000,000 
 
 
28,000,000 
436,000,000 
206,000,000 
795,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Profit sharing - Cost of products sold
 
 
 
 
 
 
1,000,000 
178,000,000 
77,000,000 
324,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cost of products sold-amortization of deferred income
(991,000,000)
(1,108,000,000)
(1,959,000,000)
(2,171,000,000)
 
 
 
 
 
 
 
 
 
 
 
(74,000,000)
 
(149,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments to/(from) alliance partners - Cost of products sold
 
 
 
 
 
 
 
(6,000,000)
(9,000,000)
(9,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments to/(from) alliance partners - Marketing, selling and administrative
 
 
 
 
 
 
4,000,000 
(34,000,000)
(7,000,000)
(71,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments to/(from) alliance partners - Advertising and product promotion
 
 
 
 
 
 
(1,000,000)
(7,000,000)
(4,000,000)
(18,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Payments to/(from) alliance partners - Research and development
 
 
 
 
 
 
(2,000,000)
(21,000,000)
(9,000,000)
(43,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other (income)/expense
(104,000,000)
199,000,000 
(312,000,000)
180,000,000 
 
 
 
 
 
 
 
 
 
 
(21,000,000)
(8,000,000)
(34,000,000)
(15,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Provision for restructuring
16,000,000 
173,000,000 
37,000,000 
206,000,000 
 
 
 
(20,000,000)
(2,000,000)
(25,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Royalties
 
 
 
 
 
 
(90,000,000)
 
(138,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Transitional services
 
 
 
 
 
 
(34,000,000)
 
(65,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Gain on sale of product lines, businesses, and assets
7,000,000 
 
(252,000,000)
(1,000,000)
 
 
12,000,000 
 
(247,000,000)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred income - Cash Flow information
 
 
423,000,000 
619,000,000 
 
 
14,000,000 
 
289,000,000 
80,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Proceeds from sale of business
 
 
3,159,000,000 
 
 
 
99,000,000 
 
3,154,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other investing activities
 
 
(160,000,000)
3,000,000 
 
 
53,000,000 
 
53,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred income
2,132,000,000 
 
2,132,000,000 
 
 
1,525,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
369,000,000 
260,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
Deferred income from alliances included in liabilities related to assets held-for-sale
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 3,671,000,000 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
ACQUISITIONS ACQUISITIONS (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Acquisitions [Abstract]
 
Acquisition payment
$ 175 
Contingent and regulatory milestone payments
550 
Acquisition payment net of tax
148 
Deferred tax assets related to acquisition
$ 27 
ASSETS HELD-FOR-SALE (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Assets Held-For-Sale [Abstract]
 
 
Receivables
 
$ 83 
Inventories
38 
163 
Deferred income taxes - current
 
125 
Prepaid expenses and other
 
20 
Property, plant and equipment
 
678 
Goodwill
 
550 
Other intangible assets
 
5,682 
Other assets
 
119 
Total assets held-for-sale
38 
7,420 
Short-term borrowings and current portion of long-term debt
 
27 
Accounts payable
 
30 
Accrued expenses
 
148 
Deferred income - current
 
352 
Accrued rebates and returns
 
81 
Deferred income - noncurrent
 
3,319 
Deferred income taxes - noncurrent
 
946 
Other liabilities
 
28 
Total liabilities related to assets held-for-sale
 
$ 4,931 
OTHER (INCOME)/EXPENSE (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Other Income Expense [Abstract]
 
 
 
 
Interest expense
$ 46 
$ 50 
$ 100 
$ 100 
Investment income
(28)
(28)
(51)
(53)
Provision for restructuring
16 
173 
37 
206 
Litigation charges/(recoveries)
(20)
(22)
(22)
Equity in net income of affiliates
(33)
(50)
(69)
(86)
Gain on sale of product lines, businesses, and assets
 
(252)
(1)
Other alliance and licensing income
(144)
(32)
(252)
(89)
Pension Curtailments, Settlements And Special Termination Benefits
45 
101 
109 
101 
Other
57 
24 
Other (income)/expense
$ (104)
$ 199 
$ (312)
$ 180 
RESTRUCTURING (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Restructuring Charges [Abstract]
 
 
 
 
Employee termination benefits
$ 14 
$ 172 
$ 34 
$ 201 
Other exit costs
Provision for restructuring
16 
173 
37 
206 
Workforce reduction of manufacturing, selling, administrative, and research and development personnel
220 
890 
400 
1,135 
Liability at January 1
 
 
102 
167 
Charges
 
 
40 
209 
Change in estimates
 
 
(3)
(3)
Foreign currency translation
 
 
Spending
 
 
(48)
(130)
Liability at June 30
$ 92 
$ 244 
$ 92 
$ 244 
INCOME TAXES (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Mar. 31, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Income Tax Disclosure [Abstract]
 
 
 
 
 
Earnings Before Income Taxes
$ 448 
 
$ 530 
$ 1,433 
$ 1,204 
Provision for income taxes
114 
 
 
163 
51 
Effective income tax rate
25.40% 
 
 
11.40% 
4.20% 
Tax benefit attributable to sale of the business
 
96 
 
81 
 
Acquisition payment net of tax
148 
 
 
148 
 
Favorable impact on the prior year rate from the research and development tax credit and look thru exception - Amount
 
 
 
 
43 
U.S statutory income tax rate
 
 
 
35.00% 
 
Minimum estimated decrease in total amount of unrecognized tax benefits
300 
 
 
300 
 
Maximum estimated decrease in total amount of unrecognized tax benefits
360 
 
 
360 
 
Reduction to non current deferred tax assets and income tax liabilities
 
 
 
$ 236 
 
EARNINGS PER SHARE (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Earnings Per Share [Abstract]
 
 
 
 
Net Earnings Attributable to BMS common shareholders
$ 333 
$ 536 
$ 1,270 
$ 1,145 
Weighted-average common shares outstanding - basic
1,657 
1,644 
1,655 
1,641 
Contingently convertible debt common stock equivalents
Incremental shares attributable to share-based compensation plans
11 
15 
12 
16 
Weighted-average common shares outstanding - diluted
1,669 
1,660 
1,668 
1,658 
Earnings per share - basic
$ 0.20 
$ 0.33 
$ 0.77 
$ 0.70 
Earnings per share - diluted
$ 0.20 
$ 0.32 
$ 0.76 
$ 0.69 
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Fair Value Measurement) (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Dec. 31, 2013
Jun. 30, 2014
Certificates of Deposit [Member]
Dec. 31, 2013
Certificates of Deposit [Member]
Jun. 30, 2014
Commercial Paper [Member]
Jun. 30, 2014
Corporate Debt Securities [Member]
Dec. 31, 2013
Corporate Debt Securities [Member]
Jun. 30, 2014
Equity Funds [Member]
Dec. 31, 2013
Equity Funds [Member]
Jun. 30, 2014
Fixed Income Funds [Member]
Dec. 31, 2013
Fixed Income Funds [Member]
Jun. 30, 2014
Auction Rate Securities [Member]
Dec. 31, 2013
Auction Rate Securities [Member]
Jun. 30, 2014
Equity Securities [Member]
Jun. 30, 2014
Written Option Liability [Member]
Jun. 30, 2013
Written Option Liability [Member]
Jun. 30, 2014
Contingent Consideration Liability [Member]
Dec. 31, 2013
Contingent Consideration Liability [Member]
Jun. 30, 2013
Contingent Consideration Liability [Member]
Dec. 31, 2012
Contingent Consideration Liability [Member]
Jun. 30, 2013
Auction Rate Securities And Floating Rate Securities [Member]
Dec. 31, 2012
Auction Rate Securities And Floating Rate Securities [Member]
Jun. 30, 2014
Auction Rate Securities [Member]
Jun. 30, 2014
Interest Rate Swap Derivatives [Member]
Dec. 31, 2013
Interest Rate Swap Derivatives [Member]
Jun. 30, 2014
Foreign Exchange Forward [Member]
Dec. 31, 2013
Foreign Exchange Forward [Member]
Jun. 30, 2014
Written Option Liability [Member]
Dec. 31, 2013
Written Option Liability [Member]
Jun. 30, 2014
Contingent Consideration Liability [Member]
Dec. 31, 2013
Contingent Consideration Liability [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 1 [Member]
Equity Securities [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 2 [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 2 [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 2 [Member]
Certificates of Deposit [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 2 [Member]
Certificates of Deposit [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 2 [Member]
Commercial Paper [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 2 [Member]
Corporate Debt Securities [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 2 [Member]
Corporate Debt Securities [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 2 [Member]
Equity Funds [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 2 [Member]
Equity Funds [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 2 [Member]
Fixed Income Funds [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 2 [Member]
Interest Rate Swap Derivatives [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 2 [Member]
Interest Rate Swap Derivatives [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 2 [Member]
Foreign Exchange Forward [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 2 [Member]
Foreign Exchange Forward [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 3 [Member]
Auction Rate Securities [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 3 [Member]
Auction Rate Securities [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 3 [Member]
Written Option Liability [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 3 [Member]
Written Option Liability [Member]
Jun. 30, 2014
Fair Value, Inputs, Level 3 [Member]
Contingent Consideration Liability [Member]
Dec. 31, 2013
Fair Value, Inputs, Level 3 [Member]
Contingent Consideration Liability [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and Cash Equivalents, Fair Value Disclosure
$ 3,749 
$ 3,201 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 3,749 
$ 3,201 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available-for-sale Securities
6,718 
4,566 
1,813 
122 
200 
4,640 
4,432 
 
 
 
 
12 
12 
53 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
53 
 
 
1,813 
122 
200 
4,640 
4,432 
 
 
 
 
 
 
 
 
12 
12 
 
 
 
 
Other Marketable Securities, Current
 
 
 
 
 
 
 
94 
74 
10 
46 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
94 
74 
10 
46 
 
 
 
 
 
 
 
 
 
 
Derivative asset
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
111 
64 
22 
50 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
111 
64 
22 
50 
 
 
 
 
 
 
Derivative liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(3)
(27)
(24)
(35)
(198)
(162)
(8)
(8)
 
 
 
 
 
 
 
 
 
 
 
 
(3)
(27)
(24)
(35)
 
 
(198)
(162)
(8)
(8)
Accrued expenses
2,204 
2,152 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
69 
18 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other liabilities
624 
625 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
129 
144 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value at January 1, Asset
 
 
 
 
 
 
 
 
 
 
 
 
12 
 
 
 
 
 
 
 
31 
31 
12 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value at January 1 , Liability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(162)
(18)
(8)
(8)
(8)
(8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Additons from new collaborations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(144)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Changes in Fair Value Of The Option Liability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(36)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair value at June 30, Asset
 
 
 
 
 
 
 
 
 
 
 
 
12 
 
 
 
 
 
 
 
31 
31 
12 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Value at June 30, Liability
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ (198)
$ (162)
$ (8)
$ (8)
$ (8)
$ (8)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Available-for-sale) (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Amortized Cost
$ 6,655 
$ 4,532 
Marketable Securities, Gross Unrealized Gain in Accumulated OCI
72 
47 
Marketable Securities, Gross Unrealized Loss in Accumulated OCI
(9)
(13)
Available-for-sale Securities
6,718 
4,566 
Available-for-sale Securities, Current
2,789 
819 
Certificates of Deposit [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Amortized Cost
1,813 
122 
Available-for-sale Securities
1,813 
122 
Commercial Paper [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Amortized Cost
200 
 
Available-for-sale Securities
200 
 
Corporate Debt Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Amortized Cost
4,592 
4,401 
Marketable Securities, Gross Unrealized Gain in Accumulated OCI
51 
44 
Marketable Securities, Gross Unrealized Loss in Accumulated OCI
(3)
(13)
Available-for-sale Securities
4,640 
4,432 
Available-for-sale securities, Debt maturities, After one through five years, Fair value
3,864 
 
Auction Rate Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Amortized Cost
Marketable Securities, Gross Unrealized Gain in Accumulated OCI
Available-for-sale Securities
12 
12 
Available-for-sale securities, Debt maturities, After ten years, Fair value
12 
 
Equity Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Marketable Securities, Amortized Cost
41 
 
Marketable Securities, Gross Unrealized Gain in Accumulated OCI
18 
 
Marketable Securities, Gross Unrealized Loss in Accumulated OCI
(6)
 
Available-for-sale Securities
53 
 
Equity Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Marketable Securities, Current
94 
74 
Fixed Income Funds [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Other Marketable Securities, Current
10 
46 
Other Assets [Member] |
Equity Securities [Member]
 
 
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
 
 
Available-for-sale Securities, Noncurrent
$ 53 
 
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Derivatives and Hedging) (Details)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
USD ($)
Jun. 30, 2014
EUR (€)
Jun. 30, 2014
USD ($)
Jun. 30, 2014
EUR (€)
Jun. 30, 2014
Written Option Liability [Member]
USD ($)
Dec. 31, 2013
Written Option Liability [Member]
USD ($)
Jun. 30, 2014
Interest Rate Swap Derivatives [Member]
USD ($)
Dec. 31, 2013
Interest Rate Swap Derivatives [Member]
USD ($)
Jun. 30, 2014
Interest Rate Swap Derivatives [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2013
Interest Rate Swap Derivatives [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Jun. 30, 2014
Interest Rate Swap Derivatives [Member]
Designated as Hedging Instrument [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2013
Interest Rate Swap Derivatives [Member]
Designated as Hedging Instrument [Member]
Other Assets [Member]
USD ($)
Jun. 30, 2014
Interest Rate Swap Derivatives [Member]
Designated as Hedging Instrument [Member]
Other Noncurrent Liabilities [Member]
USD ($)
Dec. 31, 2013
Interest Rate Swap Derivatives [Member]
Designated as Hedging Instrument [Member]
Other Noncurrent Liabilities [Member]
USD ($)
Jun. 30, 2014
Foreign Exchange Forward [Member]
USD ($)
Dec. 31, 2013
Foreign Exchange Forward [Member]
USD ($)
Jun. 30, 2014
Foreign Exchange Forward [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Dec. 31, 2013
Foreign Exchange Forward [Member]
Fair Value, Inputs, Level 2 [Member]
USD ($)
Jun. 30, 2014
Foreign Exchange Forward [Member]
Designated as Hedging Instrument [Member]
Other Assets [Member]
USD ($)
Dec. 31, 2013
Foreign Exchange Forward [Member]
Designated as Hedging Instrument [Member]
Other Assets [Member]
USD ($)
Jun. 30, 2014
Foreign Exchange Forward [Member]
Designated as Hedging Instrument [Member]
Other Noncurrent Liabilities [Member]
USD ($)
Dec. 31, 2013
Foreign Exchange Forward [Member]
Designated as Hedging Instrument [Member]
Other Noncurrent Liabilities [Member]
USD ($)
Jun. 30, 2014
Foreign Exchange Forward [Member]
Designated as Hedging Instrument [Member]
Prepaid Expenses and Other Current Assets [Member]
USD ($)
Dec. 31, 2013
Foreign Exchange Forward [Member]
Designated as Hedging Instrument [Member]
Prepaid Expenses and Other Current Assets [Member]
USD ($)
Jun. 30, 2014
Foreign Exchange Forward [Member]
Designated as Hedging Instrument [Member]
Accrued expenses [Member]
USD ($)
Dec. 31, 2013
Foreign Exchange Forward [Member]
Designated as Hedging Instrument [Member]
Accrued expenses [Member]
USD ($)
Jun. 30, 2014
Euro Member Countries, Euro
USD ($)
Jun. 30, 2014
Japan, Yen
USD ($)
Derivative [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount of derivatives
 
 
 
 
 
 
$ 200 
 
 
 
$ 1,173 
$ 673 
$ 1,150 
$ 1,950 
 
 
 
 
$ 187 
$ 100 
$ 109 
$ 263 
$ 187 
$ 301 
$ 710 
$ 704 
 
 
Derivative asset
 
 
 
 
 
 
111 
64 
111 
64 
111 
64 
 
 
22 
50 
22 
50 
 
 
17 
44 
 
 
 
 
Total derivatives at fair value, liabilities
 
 
 
 
(198)
(162)
(3)
(27)
(3)
(27)
 
 
(3)
(27)
(24)
(35)
(24)
(35)
 
 
(2)
(4)
 
 
(22)
(31)
 
 
Period, in years, of reclassification to earnings, cash flow hedges
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Foreign currency forward contract cash flow hedges, net deferred gain to be reclassified during next 12 months
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
601 
319 
The period, in days, after a forecasted transaction after which cash flow hedge accounting is discontinued
60 
60 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Notional amount of nonderivative instruments designated as net investment hedges1
$ 738 
€ 541 
$ 738 
€ 541 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Debt) (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Debt Instrument [Line Items]
 
 
 
Principal value
$ 6,959 
 
$ 7,593 
Adjustments to Principal Value, Fair value of interest rate swaps
108 
 
37 
Adjustments to Principal Value, Unamortized basis adjustment from swap terminations
365 
 
442 
Adjustments to Principal Value, Unamortized bond discounts
(60)
 
(64)
Total Long-term debt
7,372 
 
8,008 
Current portion of long-term debt
 
 
27 
Long-term debt
7,372 
 
7,981 
Long-term debt, fair value
8,011 
 
8,487 
Interest payments
89 
105 
 
Debt Instrument, Interest Rate, Stated Percentage
5.45% 
 
 
5.45% Notes Due 2018 [Member]
 
 
 
Debt Instrument [Line Items]
 
 
 
Extinguishment of Debt, Principal Value
582 
 
 
Extinguishment Of Debt, Carrying Value
633 
 
 
Extinguishment of Debt, Redemption Price
676 
 
 
Extinguishment of Debt, Notional amount of interest rate swaps terminated
500 
 
 
Extinguishment of Debt, Swap Termination Payments
(4)
 
 
Extinguishment of Debt, Total loss
$ 45 
 
 
RECEIVABLES (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Accounts, Notes, Loans and Financing Receivable [Line Items]
 
 
 
Trade receivables
$ 1,884 
 
$ 1,779 
Less allowances
(85)
 
(89)
Net trade receivables
1,799 
 
1,690 
Alliance partners receivables
1,033 
 
1,122 
Prepaid and refundable income taxes
290 
 
262 
Other receivables
193 
 
286 
Receivables
3,315 
 
3,360 
Non-U.S. receivables sold on a nonrecourse basis
$ 424 
$ 505 
 
Percent of aggregate total trade receivables due from three largest pharmaceutical wholesalers
37.00% 
 
40.00% 
The number of the largest pharmaceutical wholesalers in the U.S.
 
 
INVENTORIES (Details) (USD $)
In Millions, unless otherwise specified
Jun. 30, 2014
Dec. 31, 2013
Inventory, Net [Abstract]
 
 
Finished goods
$ 550 
$ 491 
Work in process
800 
757 
Raw and packaging materials
316 
250 
Inventories
1,666 
1,498 
Inventories expected to remain on-hand beyond one year and included in other assets
$ 269 
$ 351 
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
$ 8,936 
 
$ 8,843 
Less accumulated depreciation
(4,498)
 
(4,264)
Property, plant and equipment
4,438 
 
4,579 
Property Plant And Equipment Related To Manufacturing Facility Expected To Be Sold
276 
 
 
Depreciation expense
275 
219 
 
Land [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
110 
 
109 
Buildings [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
4,806 
 
4,748 
Machinery, equipment and fixtures [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
3,773 
 
3,699 
Construction in progress [Member]
 
 
 
Property, Plant and Equipment [Line Items]
 
 
 
Gross property, plant and equipment
$ 247 
 
$ 287 
OTHER INTANGIBLE ASSETS (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
In-process research and development
$ 205 
 
$ 548 
Gross other intangible assets
5,082 
 
5,436 
Less: accumulated amortization
(3,239)
 
(3,118)
Other intangible assets
1,843 
 
2,318 
Impairment charge for peginterferon lambda intangible asset
310 
 
 
Amortization expense
151 
431 
 
Licensing Agreements [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Finite-lived intangible assets
1,151 
 
1,162 
Developed Technology Rights [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Finite-lived intangible assets
2,468 
 
2,486 
Computer Software, Intangible Asset [Member]
 
 
 
Acquired Finite-Lived Intangible Assets [Line Items]
 
 
 
Finite-lived intangible assets
$ 1,258 
 
$ 1,240 
DEFERRED INCOME (Details) (USD $)
In Millions, unless otherwise specified
6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Deferred Revenue Disclosure [Abstract]
 
 
 
Upfront, milestone and other licensing payments
$ 885 
 
$ 970 
Atripla* deferred revenue
461 
 
468 
Gain on sale-leaseback transactions
57 
 
71 
Diabetes business divestiture (Undelivered elements)
629 
 
 
Other
100 
 
16 
Total deferred income
2,132 
 
1,525 
Deferred income current
1,090 
 
756 
Deferred income non-current
1,042 
 
769 
Amortization of deferred income
$ 174 
$ 248 
 
EQUITY (Changes in Equity) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
Common Stock, Shares Issued, Balance at January 1,
 
 
2,208 
2,208 
Common Stock, Shares Issued, Balance at June 30,
2,208 
2,208 
2,208 
2,208 
Common Stock, Value, Issued, Balance at January 1,
 
 
$ 221 
$ 221 
Common Stock, Value, Issued, Balance at June 30,
221 
221 
221 
221 
Capital in Excess of Par Value of Stock, Balance at January 1,
 
 
1,922 
2,694 
Employee stock compensation plans, Capital in Excess of Par
 
 
(427)
(719)
Debt Conversion, Capital in Excess of Par Value of Stock
 
 
(16)
 
Capital in Excess of Par Value of Stock, Balance at June 30,
1,479 
1,975 
1,479 
1,975 
Retained Earnings, Balance at January 1,
 
 
32,952 
32,733 
Net Earnings Attributable to BMS
333 
536 
1,270 
1,145 
Cash dividends declared
 
 
(1,196)
(1,163)
Retained Earnings, Balance at June 30,
33,026 
32,715 
33,026 
32,715 
Treasury Stock, Shares, Balance at January 1,
 
 
559 
570 
Treasury Stock, Shares, Balance at June 30,
550 
562 
550 
562 
Cost of Treasury Stock, Balance at January 1,
 
 
(17,800)
(18,823)
Stock repurchase program, Cost of Treasury Stock
 
 
 
(364)
Cost of Treasury Stock, Balance at June 30,
(17,174)
(18,020)
(17,174)
(18,020)
Noncontrolling interest, Balance at January 1,
 
 
82 
15 
Net earnings attributable to noncontrolling interest
 
 
21 
Distributions
 
 
(31)
(34)
Noncontrolling interest, Balance at June 30,
52 
52 
Treasury Stock [Member]
 
 
 
 
Increase (Decrease) in Stockholders' Equity [Roll Forward]
 
 
 
 
Employee stock compensation plans, Shares
 
 
(8)
(18)
Debt conversion, Shares
 
 
(1)
 
Employee stock compensation plans, Cost
 
 
591 
1,167 
Debt conversion, cost
 
 
$ 35 
 
Stock repurchase program, Treasury Stock
 
 
 
10 
EQUITY (Other Comprehensive Income/(Loss)) (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Other Comprehensive Income (Loss), before Tax [Abstract]
 
 
 
 
 
Derivatives qualifying as cash flow hedges - Unrealized gains, Pre-tax
$ (14)
$ 30 
$ (19)
$ 99 
 
Derivatives qualifying as cash flow hedges - Reclassified to net earnings, Pre-tax
(34)
(44)
 
Derivatives qualifying as cash flow hedges, Pre-tax
(7)
(4)
(14)
55 
 
Pension and postretirement benefits - Actuarial losses, Pre-tax
(49)
935 
(299)
935 
 
Pension and postretirement benefits - Amortization, Pre-tax
27 
38 
53 
76 
 
Pension and postretirement benefits - Settlement, Pre-Tax
45 
101 
99 
101 
 
Pension and postretirement benefits, Pre-tax
23 
1,074 
(147)
1,112 
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, before Tax
25 
(54)
29 
(51)
 
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, before Tax
(1)
(8)
(1)
(8)
 
Available for sale securities, Pre-tax
24 
(62)
28 
(59)
 
Foreign currency translation, Pre-tax
21 
(33)
10 
(34)
 
Other Comprehensive Income/(Loss), Pre-tax
61 
975 
(123)
1,074 
 
Other Comprehensive Income (Loss), Tax, Parenthetical Disclosures [Abstract]
 
 
 
 
 
Derivatives qualifying as cash flow hedges - Unrealized gains, Tax
(10)
(33)
 
Derivatives qualifying as cash flow hedges - Reclassified to net earnings, Tax
(2)
11 
 
16 
 
Derivatives qualifying as cash flow hedges, Tax
(17)
 
Pension and postretirement benefits - Actuarial gains/(losses), Tax
13 
(330)
103 
(330)
 
Pension and postretirement benefits - Amortization, Tax
(6)
(12)
(19)
(23)
 
Pension and postretirement benefits - Settlements, Tax
(17)
(35)
(38)
(35)
 
Pension and postretirement benefits, Tax
(10)
(377)
46 
(388)
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Tax
(11)
(13)
10 
 
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Tax
 
 
 
Available for sale securities, Tax
(11)
12 
(13)
13 
 
Other comprehensive income/(loss), Tax
(19)
(364)
39 
(392)
 
Other Comprehensive Income (Loss), Net of Tax [Abstract]
 
 
 
 
 
Derivatives qualifying as cash flow hedges - Unrealized gains, After tax
(10)
20 
(13)
66 
 
Derivatives qualifying as cash flow hedges - Reclassified to net earnings, After tax
(23)
(28)
 
Derivatives qualifying as cash flow hedges, After tax
(5)
(3)
(8)
38 
 
Pension and postretirement benefits - Actuarial gains/(losses), After tax
(36)
605 
(196)
605 
 
Pension and postretirement benefits - Amortization, After tax
21 
26 
34 
53 
 
Pension and postretirement benefits - Settlements, After tax
28 
66 
61 
66 
 
Pension and postretirement benefits, after tax
13 
697 
(101)
724 
 
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax
14 
(45)
16 
(41)
 
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax
(1)
(5)
(1)
(5)
 
Available for sale securities, After tax
13 
(50)
15 
(46)
 
Foreign currency translation, After-tax
21 
(33)
10 
(34)
 
Other Comprehensive Income/(Loss)
42 
611 
(84)
682 
 
Derivatives qualifying as cash flow hedges
 
 
16 
Pension and postretirement benefits
(1,958)
 
(1,958)
 
(1,857)
Available for sale securities
43 
 
43 
 
28 
Foreign currency translation
(318)
 
(318)
 
(328)
Accumulated other comprehensive loss
$ (2,225)
 
$ (2,225)
 
$ (2,141)
PENSION AND POSTRETIREMENT BENEFIT PLANS (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Dec. 31, 2013
Jun. 30, 2014
Pension Benefits [Member]
Jun. 30, 2013
Pension Benefits [Member]
Jun. 30, 2014
Pension Benefits [Member]
Jun. 30, 2013
Pension Benefits [Member]
Jun. 30, 2014
Other Benefits [Member]
Jun. 30, 2013
Other Benefits [Member]
Jun. 30, 2014
Other Benefits [Member]
Jun. 30, 2013
Other Benefits [Member]
Jun. 30, 2014
United States and Foreign Pension Plans, Defined Benefit [Member]
Dec. 31, 2014
United States and Foreign Pension Plans, Defined Benefit [Member]
Jun. 30, 2014
United States Defined Contribution Plans [Member]
Jun. 30, 2013
United States Defined Contribution Plans [Member]
Jun. 30, 2014
United States Defined Contribution Plans [Member]
Jun. 30, 2013
United States Defined Contribution Plans [Member]
Service cost - benefits earned during the period
 
 
 
 
 
$ 10 
$ 9 
$ 20 
$ 19 
$ 1 
$ 2 
$ 2 
$ 3 
 
 
 
 
 
 
Interest cost on projected benefit obligation
 
 
 
 
 
77 
75 
155 
149 
 
 
 
 
 
 
Expected return on plan assets
 
 
 
 
 
(133)
(131)
(264)
(263)
(7)
(7)
(14)
(13)
 
 
 
 
 
 
Amortization of prior service credits
 
 
 
 
 
(1)
(1)
(2)
(2)
(1)
(1)
(1)
(1)
 
 
 
 
 
 
Amortization of net actuarial loss
 
 
 
 
 
29 
37 
56 
75 
 
 
 
 
 
 
 
 
 
 
Pension curtailments and settlements
 
 
 
 
 
45 
101 
99 
101 
 
 
(3)
 
 
 
 
 
 
 
Special termination benefits
 
 
 
 
 
 
 
13 
 
 
 
 
 
 
 
 
 
 
 
Net periodic (credit)/cost
 
 
 
 
 
27 
90 
77 
79 
(3)
(2)
(9)
(4)
 
 
 
 
 
 
Decrease to other assets and a corresponding increase in AOCI
49 
(935)
299 
(935)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Weighted average discount rate assumed in remeasuring the pension benefit obligations
 
 
4.00% 
 
4.60% 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Expected contributions to pension plans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
120 
 
 
 
 
Contributions to pension plan
 
 
 
 
 
 
 
 
 
 
 
 
 
83 
 
 
 
 
 
Defined contribution plan expense
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 46 
$ 43 
$ 96 
$ 90 
EMPLOYEE STOCK BENEFIT PLANS (Details) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Total stock-based compensation expense
$ 50 
$ 46 
$ 99 
$ 95 
Income tax benefit
17 
18 
33 
34 
Unrecognized compensation cost
367 
 
367 
 
Weighted-average period over which unrecognized compensation cost is expected to be recognized
 
 
2 years 7 months 6 days 
 
Employee Stock Option [Member]
 
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Total stock-based compensation expense
 
 
Restricted Stock [Member]
 
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Total stock-based compensation expense
19 
19 
38 
37 
Number of shares granted
 
 
1.7 
 
Weighted average grant date fair value of grants during the period
 
 
$ 52.58 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
 
 
4 years 0 months 0 days 
 
Market share units [Member]
 
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Total stock-based compensation expense
17 
16 
Number of shares granted
 
 
0.9 
 
Weighted average grant date fair value of grants during the period
 
 
$ 55.44 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
 
 
4 years 0 months 0 days 
 
Performance share units [Member]
 
 
 
 
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
 
 
 
 
Total stock-based compensation expense
$ 23 
$ 18 
$ 44 
$ 41 
Number of shares granted
 
 
2.3 
 
Weighted average grant date fair value of grants during the period
 
 
$ 55.17 
 
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period
 
 
3 years 0 months 0 days 
 
LEGAL PROCEEDINGS AND CONTINGENCIES (Details) (USD $)
In Millions, unless otherwise specified
3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 12 Months Ended 12 Months Ended 1 Months Ended 6 Months Ended
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Jun. 30, 2013
Jun. 30, 2014
Baraclude [Member]
Jun. 30, 2013
Baraclude [Member]
Jun. 30, 2014
Baraclude [Member]
Jun. 30, 2013
Baraclude [Member]
Dec. 31, 2013
Baraclude [Member]
South Korea [Member]
Aug. 31, 2013
Atripla Intellectual Property Litigation [Member]
Mar. 31, 2010
Atripla Intellectual Property Litigation [Member]
Jan. 31, 2010
Atripla Intellectual Property Litigation [Member]
Apr. 30, 2009
Atripla Intellectual Property Litigation [Member]
Dec. 31, 2013
Baraclude Intellectual Property Litigation [Member]
Aug. 31, 2010
Baraclude Intellectual Property Litigation [Member]
Nov. 30, 2008
Plavix Intellectual Property Litigation [Member]
Nov. 30, 2008
Remaining Apotex Matters Related To Plavix [Member]
Jun. 30, 2014
AWP Litigation [Member]
Sep. 30, 2010
AWP Litigation [Member]
Jun. 30, 2014
Qui Tam Litigation [Member]
Jun. 30, 2014
Plavix Product Liability Litigation [Member]
Jun. 30, 2014
Reglan Product Liability [Member]
Jun. 30, 2014
Byetta Product Liability Litigation [Member]
Jun. 30, 2014
Environmental Proceedings Cercla Matters [Member]
Jun. 30, 2014
Environmental Proceedings New Brunswick [Member]
Oct. 30, 2011
Environmental Proceedings New Brunswick [Member]
May 31, 2008
Environmental Proceedings New Brunswick [Member]
Jun. 30, 2014
Environmental Proceedings North Brunswick [Member]
payment
Legal Proceedings And Contingencies [Line Items]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of patents owned
 
 
 
 
 
 
 
 
 
 
 
15 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of patents challenged
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of lawsuits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
350 
 
500 
200 
300 
 
Number Of Interim Payments
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Number of patent infringement lawsuits
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Settlement relating to efavirenz polymorph patents
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loss contingency, Estimate of possible loss
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$ 28 
 
 
 
 
$ 64 
 
 
 
 
Number of plaintiffs settled
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
510 
 
 
 
 
 
Number of current plaintiffs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
6,300 
3,000 
1,500 
 
 
 
 
 
Number of sales representatives
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Litigation settlement, Gross
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60 
 
 
 
 
 
 
 
 
 
 
 
Interest percentage on damages sought by third party
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1.00% 
 
 
 
 
 
 
 
 
 
 
 
Total revenues
$ 3,889 
$ 4,048 
$ 7,700 
$ 7,879 
$ 369 
$ 371 
$ 775 
$ 737 
$ 158 
 
 
 
 
$ 289