| EQUITY
|
|
|
|
|
|
|
|
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. |
|
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. |
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% |
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. |
|
|
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 |
|
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 |
|
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 |
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 |
|
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 | % |
• | 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. |
|
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 | — | — | — | — |
|
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. |
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 |
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 |
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 | ) |
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. |
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 |
|
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 |
|
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 |
|
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 |
|
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 |
|
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 |
|
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 |
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. |
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 | ) |
|
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 | ) |
|
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 |
|
|
|
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. |
|
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. |
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% |
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. |
|
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 |
|
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 |
|
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 |
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 |
|
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 | % |
|
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 | — | — | — | — |
|
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. |
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 |
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 |
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 | ) |
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. |
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 |
|
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 |
|
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 |
|
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 |
|
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 |
|
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 |
|
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 |
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. |
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 | ) |
|
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 | ) |
|
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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|