ý
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
|
95-3540776
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
One Amgen Center Drive,
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91320-1799
|
Thousand Oaks, California
|
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(Zip Code)
|
(Address of principal executive offices)
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Title of each class
|
|
Name of each exchange on which registered
|
Common stock, $0.0001 par value
|
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The NASDAQ Global Select Market
|
Large accelerated filer
ý
|
Accelerated filer
¨
|
Non-accelerated filer
¨
|
Smaller reporting company
¨
|
Emerging growth company
¨
|
(A)
|
Excludes
884,143
shares of common stock held by directors and executive officers, and any stockholders whose ownership exceeds ten percent of the shares outstanding, at June 30, 2018. Exclusion of shares held by any person should not be construed to indicate that such person possesses the power, directly or indirectly, to direct or cause the direction of the management or policies of the registrant, or that such person is controlled by or under common control with the registrant.
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Page No.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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Item 15.
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Item 16.
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Item 1.
|
BUSINESS
|
•
|
In March 2018, we announced that the U.S. Food and Drug Administration (FDA) approved under accelerated approval the supplemental Biologics License Application (sBLA) for BLINCYTO
®
for the treatment of adults and children with B-cell precursor acute lymphoblastic leukemia (ALL) in first or second complete remission with minimal residual disease greater than or equal to 0.1 percent.
|
•
|
In June 2018, we announced that the European Commission (EC) granted a full marketing authorization for BLINCYTO
®
based on the overall survival data from the phase 3 TOWER study in adult patients with Philadelphia chromosome-negative relapsed or refractory B-cell precursor ALL.
|
•
|
In August 2018, we announced that the EC approved an expanded indication for BLINCYTO
®
as monotherapy for the treatment of pediatric patients aged one year or older with Philadelphia chromosome-negative CD19 positive B-cell precursor ALL, which is refractory or in relapse after receiving at least two prior therapies or in relapse after receiving prior allogeneic hematopoietic stem cell transplantation.
|
•
|
In January 2019, we announced that the EC approved an expanded indication for BLINCYTO
®
as monotherapy to include adult patients with Philadelphia chromosome-negative CD19 positive B-cell precursor ALL in first or second complete remission with minimal residual disease greater than or equal to 0.1 percent.
|
•
|
In January 2018, we announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion resulting in a label variation for KYPROLIS
®
to include updated overall survival data from the phase 3 head-to-head ENDEAVOR (RandomizEd, OpeN Label, Phase 3 Study of Carfilzomib Plus DExamethAsone Vs Bortezomib Plus DexamethasOne in Patients With Relapsed Multiple Myeloma) study in patients with relapsed or refractory multiple myeloma.
|
•
|
In April 2018, we announced that the CHMP of the EMA adopted a positive opinion resulting in a label variation for KYPROLIS
®
to include the final overall survival data from the phase 3 ASPIRE (CArfilzomib, Lenalidomide, and DexamethaSone versus Lenalidomide and Dexamethasone for the treatment of PatIents with Relapsed Multiple MyEloma) study. In June 2018, we announced that the FDA approved the supplemental New Drug Application (sNDA) to add the positive overall survival data from the ASPIRE study to the U.S. Prescribing Information for patients with relapsed or refractory myeloma.
|
•
|
In October 2018, we announced that the FDA approved the sNDA to expand the Prescribing Information for KYPROLIS
®
to include a once-weekly dosing option in combination with dexamethasone for patients with relapsed or refractory multiple myeloma.
|
•
|
In February 2018, we announced that the CHMP of the EMA issued a positive opinion recommending a label variation for Neulasta
®
to include the
Neulasta
®
Onpro
®
kit.
|
•
|
In May 2018, we announced that the EC approved a new indication in the Repatha
®
label for adults with established atherosclerotic cardiovascular disease (myocardial infarction, stroke or peripheral arterial disease) to reduce cardiovascular risk by lowering low-density lipoprotein (LDL) cholesterol levels.
|
•
|
In October 2018, we announced a set of new National Drug Codes (NDCs) to make Repatha
®
available at a 60% lower list price of $5,850 per year to address affordability for patients, particularly those on Medicare.
|
•
|
In January 2019, we announced that the National Medical Products Administration approved a new indication for Repatha
®
as the first PCSK9 inhibitor in China for adults with established atherosclerotic cardiovascular disease to reduce the risk of myocardial infarction, stroke and coronary revascularization.
|
•
|
In May 2018, we announced that the FDA approved Aimovig
®
for the preventive treatment of migraine in adults. Aimovig
®
is part of a joint development and commercialization collaboration with Novartis AG (Novartis).
|
•
|
In September 2018, we announced that the FDA granted Breakthrough Therapy Designation for tezepelumab in patients with severe asthma without an eosinophilic phenotype. Tezepelumab is being developed jointly in collaboration with AstraZeneca plc (AstraZeneca).
|
•
|
In January 2019, we and UCB, our global collaboration partner in the development of EVENITY
TM
, announced that the FDA Bone, Reproductive and Urologic Drugs Advisory Committee (BRUDAC) voted to recommend approval of EVENITY
TM
for the treatment of osteoporosis in postmenopausal women at high risk for fracture. Also in January 2019, the Japanese Ministry of Health, Labor and Welfare granted a marketing authorization for the treatment of osteoporosis in men and postmenopausal women at high risk of fracture.
|
•
|
In May 2018 and June 2018, the FDA and the EC, respectively, approved a new indication for Prolia
®
for the treatment of glucocorticoid-induced osteoporosis in adult patients at high risk of fracture.
|
•
|
In April 2018, we announced that the EC approved an expanded indication for XGEVA
®
for the prevention of skeletal-related events (SREs) in patients with multiple myeloma.
|
•
|
In October 2018, we began launching AMGEVITA
TM
in markets across Europe.
|
•
|
In May 2018, the EC granted marketing authorization for KANJINTI
TM
, a biosimilar candidate to Herceptin
®
, for the treatment of HER2-positive metastatic breast cancer, HER2-positive early breast cancer and HER2-positive metastatic adenocarcinoma of the stomach or gastroesophageal junction. KANJINTI
TM
is being developed in collaboration with Allergan plc (Allergan).
|
•
|
In May 2018, we announced that we received a Complete Response Letter from the FDA for the Biologics License Application (BLA) for KANJINTI
TM
. In December 2018, we refiled our BLA with the FDA for KANJINTI
TM
.
|
•
|
In June 2018, we announced results from a phase 3 study evaluating the efficacy and safety of biosimilar candidate ABP 710 compared with REMICADE
®
(infliximab) in patients with moderate-to-severe rheumatoid arthritis. The results confirmed noninferiority compared to infliximab but could not rule out superiority based on its primary efficacy endpoint.
|
•
|
In December 2018 and January 2019, we submitted a BLA to the FDA and a Marketing Authorization Application (MAA) to the EMA, respectively, for ABP 710.
|
•
|
In January 2019, we and Allergan announced positive top-line results from a phase 1/phase 3 study evaluating the pharmacokinetics, efficacy and safety of ABP 798, a biosimilar candidate to RITUXAN
®
(rituximab), compared to rituximab in patients with moderate-to-severe rheumatoid arthritis. The results demonstrate that the study met its primary endpoint of pharmacokinetic similarity. Additionally, equivalent efficacy was established and a similar safety profile was demonstrated.
|
•
|
In April 2018, we announced plans to build a new next-generation biomanufacturing plant on our campus in West Greenwich, Rhode Island. The new plant will employ our next-generation biomanufacturing capabilities and manufacture products for the U.S. and global markets.
|
•
|
moderately to severely active rheumatoid arthritis;
|
•
|
chronic moderate-to-severe plaque psoriasis patients who are candidates for systemic therapy or phototherapy; and
|
•
|
active psoriatic arthritis.
|
Product
|
|
Territory
|
|
General subject matter
|
|
Expiration
|
Enbrel
®
(etanercept)
|
|
U.S.
|
|
Methods of treating psoriasis
|
|
8/13/2019
|
|
U.S.
|
|
Aqueous formulation and methods of treatment using the formulation
|
|
6/8/2023
|
|
|
U.S.
|
|
Fusion protein, and pharmaceutical compositions
|
|
11/22/2028
|
|
|
U.S.
|
|
DNA encoding fusion protein, and methods of making fusion protein
|
|
4/24/2029
|
|
Prolia
®
/
XGEVA ® (denosumab) |
|
U.S.
|
|
RANKL antibodies
|
|
9/17/2021
|
|
U.S.
|
|
Methods of treatment
|
|
6/25/2022
|
|
|
U.S.
|
|
Nucleic acids encoding RANKL antibodies, and methods of producing RANKL antibodies
|
|
11/30/2023
|
|
|
U.S.
|
|
RANKL antibodies including sequences
|
|
2/19/2025
|
|
|
Europe
|
|
RANKL antibodies including epitope binding
|
|
2/23/2021
|
|
|
Europe
|
|
RANKL antibodies including sequences
(1)
|
|
6/25/2022
|
|
Aranesp
®
(darbepoetin alfa)
|
|
U.S.
|
|
Glycosylation analogs of erythropoietin proteins
|
|
5/15/2024
|
Sensipar
®
/
Mimpara ® (cinacalcet) |
|
U.S.
|
|
Formulation
|
|
9/22/2026
|
|
Europe
|
|
Calcium receptor-active molecules
(1)
|
|
10/23/2015
|
|
|
Europe
|
|
Formulation
|
|
9/10/2024
|
|
KYPROLIS
®
(carfilzomib)
|
|
U.S.
|
|
Compositions and compounds
|
|
12/7/2027
|
|
U.S.
|
|
Methods of treatment
|
|
4/14/2025
|
|
|
U.S.
|
|
Methods of making
|
|
5/8/2033
|
|
|
Europe
|
|
Compositions, compounds and methods of treatment
(1)
|
|
8/8/2025
|
|
Nplate
®
(romiplostim)
|
|
U.S.
|
|
Thrombopoietic compounds
|
|
1/19/2022
|
|
U.S.
|
|
Formulation
|
|
2/12/2028
|
|
|
Europe
|
|
Thrombopoietic compounds
(1)
|
|
10/22/2019
|
|
|
Europe
|
|
Formulation
|
|
4/20/2027
|
|
Vectibix
®
(panitumumab)
|
|
U.S.
|
|
Human monoclonal antibodies to epidermal growth factor receptor
|
|
4/8/2020
|
|
Europe
|
|
Human monoclonal antibodies to epidermal growth factor receptor
(1)
|
|
5/5/2018
|
|
Repatha
®
(evolocumab)
|
|
U.S.
|
|
Antibodies
(2)
|
|
10/25/2029
|
|
U.S.
|
|
Methods of treatment
|
|
10/8/2030
|
|
|
Europe
|
|
Compositions and method of treatment
|
|
8/22/2028
|
|
Parsabiv
®
(etelcalcetide)
|
|
U.S.
|
|
Compound and pharmaceutical composition
(2)
|
|
7/29/2030
|
|
U.S.
|
|
Formulation
|
|
6/27/2034
|
|
|
Europe
|
|
Compound and pharmaceutical composition
|
|
7/29/2030
|
|
|
Europe
|
|
Formulation
|
|
6/27/2034
|
|
BLINCYTO
®
(blinatumomab)
|
|
U.S.
|
|
Bifunctional polypeptides
(2)
|
|
4/21/2019
|
|
U.S.
|
|
Method of administration
|
|
9/28/2027
|
|
|
Europe
|
|
Bifunctional polypeptides
(1)
|
|
11/26/2024
|
|
|
Europe
|
|
Method of administration
|
|
11/29/2026
|
|
Aimovig
®
(erenumab-aooe)
|
|
U.S.
|
|
CGRP receptor antibodies
(2)
|
|
11/9/2031
|
|
U.S.
|
|
Methods of treatment
|
|
12/18/2029
|
|
|
Europe
|
|
CGRP receptor antibodies and methods of treatment
|
|
12/18/2029
|
|
IMLYGIC
®
(talimogene laherparepvec)
|
|
U.S.
|
|
Compositions
|
|
11/23/2025
|
|
U.S.
|
|
Method of treatment
|
|
3/27/2022
|
|
|
Europe
|
|
Composition and uses
(1)
|
|
3/27/2022
|
|
Corlanor
®
(ivabradine)
|
|
U.S.
|
|
Crystalline forms
|
|
2/22/2026
|
(1)
|
A European patent with this subject matter may also be entitled to supplemental protection in one or more countries in Europe, and the length of any such extension will vary by country. For example, supplementary protection certificates have been issued related to the indicated products for patents in at least the following countries:
|
(2)
|
A patent with this subject matter may be entitled to patent term extension in the United States.
|
Product
|
|
Territory
|
|
Competitor-marketed product
|
|
Competitors
|
ENBREL
|
|
U.S. & Canada
|
|
REMICADE
®
*
|
|
Janssen Biotech, Inc. (Janssen)
(1)
|
|
U.S. & Canada
|
|
HUMIRA
®
|
|
AbbVie Inc.
|
|
|
U.S. & Canada
|
|
STELARA
®(2)
|
|
Janssen
(1)
|
|
|
U.S. & Canada
|
|
Otezla
®(2)
|
|
Celgene Corporation (Celgene)
|
|
Neulasta
®(3)
|
|
U.S.
|
|
UDENYCA
TM
|
|
Coherus BioSciences, Inc.
|
|
U.S.
|
|
Fulphila
®
|
|
Mylan Institutional Inc.
|
|
|
U.S. & Europe
|
|
Filgrastim biosimilars
|
|
Various
|
|
Prolia
®
|
|
U.S. & Europe
|
|
Alendronate, raloxifene and zoledronate generics
|
|
Various
|
Aranesp
®
|
|
U.S.
|
|
PROCRIT
®(4)
|
|
Janssen
(1)
|
|
U.S.
|
|
MIRCERA
®(5)
|
|
Galenica Group (Galenica)/F. Hoffmann-La Roche Ltd. (Roche)
|
|
|
U.S. & Europe
|
|
Epoetin alfa biosimilars
|
|
Various
|
|
XGEVA
®
|
|
U.S. & Europe
|
|
Zoledronate generics
|
|
Various
|
Sensipar
®(6)
/
Mimpara
®
|
|
U.S. & Europe
|
|
Active vitamin D analogs
|
|
Various
|
EPOGEN
®(3)
|
|
U.S.
|
|
MIRCERA
®(5)
|
|
Galenica/Roche
|
|
U.S.
|
|
RETACRIT
TM
|
|
Hospira
(7)
|
|
KYPROLIS
®(9)
|
|
U.S.
|
|
VELCADE
®
|
|
Millennium Pharmaceuticals, Inc.
(8)
|
|
U.S.
|
|
REVLIMID
®
|
|
Celgene
|
|
|
U.S.
|
|
POMALYST
®
|
|
Celgene
|
|
|
U.S.
|
|
DARZALEX
®
|
|
Janssen
(1)
|
|
Repatha
®
|
|
U.S. & Europe
|
|
PRALUENT
®
|
|
Regeneron
Sanofi
|
Parsabiv
®
|
|
U.S. & Europe
|
|
Active vitamin D analogs
|
|
Various
|
Aimovig
®
|
|
U.S.
|
|
AJOVY
TM
|
|
Teva Pharmaceuticals USA, Inc.
|
|
U.S.
|
|
Emgality
TM
|
|
Eli Lilly and Company
|
(1)
|
A subsidiary of Johnson & Johnson (J&J).
|
(2)
|
Dermatology only.
|
(3)
|
Other biosimilars under regulatory review in the United States and Europe.
|
(4)
|
PROCRIT
®
competes with Aranesp
®
in the supportive cancer care and predialysis settings.
|
(5)
|
MIRCERA
®
competes with Aranesp
®
only in the nephrology segment.
|
(6)
|
Our U.S. composition of matter patent for Sensipar
®
expired in March 2018. We are engaged in litigation with a number of companies seeking to market generic versions of Sensipar
®
surrounding our U.S. formulation patent that expires in September 2026. See Part IV—Note 20, Contingencies and commitments, to the Consolidated Financial Statements, for further information. Several of these generic versions of Sensipar
®
have been approved by the FDA.
|
(7)
|
A subsidiary of Pfizer Inc. (Pfizer)
|
(8)
|
A subsidiary of Takeda Pharmaceutical Company Limited.
|
(9)
|
KYPROLIS
®
is facing increased competition from several recently approved products.
|
•
|
investing billions of dollars annually in R&D;
|
•
|
developing more affordable therapeutic choices in the form of high-quality and reliably-supplied biosimilars;
|
•
|
pricing our medicines to reflect the value they provide;
|
•
|
partnering with payers to share risk and accountability for health outcomes;
|
•
|
providing patient support and education programs and helping patients in financial need access our medicines; and
|
•
|
working with policy makers, patients and other stakeholders to establish a sustainable healthcare system with access to affordable care and where patients and their healthcare professionals are the primary decision makers.
|
•
|
In phase 1, we conduct small clinical trials to investigate the safety and proper dose ranges of our product candidates in a small number of human subjects.
|
•
|
In phase 2, we conduct clinical trials to investigate side-effect profiles and the efficacy of our product candidates in a large number of patients who have the disease or condition under study.
|
•
|
In phase 3, we conduct clinical trials to investigate the safety and efficacy of our product candidates in a large number of patients who have the disease or condition under study.
|
Molecule
|
|
Disease/condition
|
Phase 3 Programs
|
|
|
ENBREL
|
|
Rheumatoid arthritis remission
|
EVENITY
TM
|
|
Postmenopausal osteoporosis;
Male osteoporosis
|
IMLYGIC
®
|
|
Metastatic melanoma
|
KYPROLIS
®
|
|
Multiple myeloma
|
Omecamtiv mecarbil
|
|
Chronic heart failure
|
Tezepelumab
|
|
Severe asthma
|
AMG 520 / CNP520
|
|
Alzheimer’s disease
|
Phase 2 Programs
|
|
|
BLINCYTO
®
|
|
Diffuse large B-cell lymphoma
|
Tezepelumab
|
|
Atopic dermatitis
|
AMG 714 / PRV-015
|
|
Celiac disease
|
Phase 1 Programs
|
|
|
IMLYGIC
®
|
|
Various cancer types
|
AMG 119
|
|
Small-cell lung cancer
|
AMG 160
|
|
Prostate cancer
|
AMG 176
|
|
Hematologic malignancies
|
AMG 212
|
|
Prostate cancer
|
AMG 330
|
|
Acute myeloid leukemia
|
AMG 397
|
|
Hematologic malignancies
|
AMG 420
|
|
Multiple myeloma
|
AMG 424
|
|
Multiple myeloma
|
AMG 427
|
|
Acute myeloid leukemia
|
AMG 510
|
|
Solid tumors
|
AMG 562
|
|
Non-Hodgkin’s lymphoma
|
AMG 570
|
|
Systemic lupus erythematosus
|
AMG 592
|
|
Inflammatory diseases
|
AMG 596
|
|
Glioblastoma
|
AMG 598
|
|
Obesity
|
AMG 673
|
|
Acute myeloid leukemia
|
AMG 701
|
|
Multiple myeloma
|
AMG 757
|
|
Small-cell lung cancer
|
AMG 890
|
|
Cardiovascular disease
|
AMG 966
|
|
Inflammatory bowel diseases (Crohn’s and ulcerative colitis)
|
AMG 986
|
|
Heart failure
|
Phase 3
|
Clinical trials investigate the safety and efficacy of product candidates in a large number of patients who have the disease or condition under study; typically performed with registrational intent.
|
Phase 2
|
Clinical trials investigate side effect profiles and efficacy of product candidates in a large number of patients who have the disease or condition under study.
|
Phase 1
|
Clinical trials investigate the safety and proper dose ranges of product candidates in a small number of human subjects.
|
Molecule
|
|
Disease/condition
|
|
Program change
|
Aimovig
®
|
|
Migraine prevention
|
|
BLA approved by FDA
|
Aranesp
®
|
|
Myelodysplastic syndromes
|
|
Concluded; no longer pursuing our marketing application with the EC
|
BLINCYTO
®
|
|
ALL
|
|
sBLA approved by FDA
|
ENBREL
|
|
Psoriatic arthritis
|
|
Concluded; study achieved its primary endpoint
|
Prolia
®
|
|
Glucocorticoid-induced osteoporosis
|
|
sBLA approved by FDA and EC
|
Molecule
|
|
Territory
|
|
General subject matter
|
|
Estimated expiration*
|
EVENITY
TM
|
|
U.S.
|
|
Polypeptides
|
|
2026
|
|
|
Europe
|
|
Polypeptides
|
|
2026
|
Omecamtiv mecarbil
|
|
U.S.
|
|
Compound
|
|
2027
|
|
|
Europe
|
|
Compound
|
|
2025
|
Tezepelumab
|
|
U.S.
|
|
Polypeptides
|
|
2029
|
|
|
Europe
|
|
Polypeptides
|
|
2028
|
AMG 520 / CNP520
|
|
U.S.
|
|
Compound
|
|
2032
|
|
|
Europe
|
|
Compound
|
|
2032
|
Program
|
|
Reference product
|
|
Status
|
ABP 710
|
|
Infliximab (REMICADE
®
)
|
|
Filed BLA with the FDA and MAA with the EMA
|
ABP 798
|
|
Rituximab (Rituxan
®
/ Mabthera
®
)
|
|
Phase 3 rheumatoid arthritis study completed
Phase 3 non-Hodgkin’s lymphoma study ongoing
|
ABP 959
|
|
Eculizumab (Soliris
®
)
|
|
Phase 3 initiated
|
Item 1A.
|
RISK FACTORS
|
•
|
revised or restrictive labeling for our products, or the potential for restrictive labeling that may result in our decision not to commercialize a product candidate;
|
•
|
requirement of risk management activities or other regulatory agency compliance actions related to the promotion and sale of our products;
|
•
|
mandated post-marketing commitments or pharmacovigilance programs for our approved products;
|
•
|
product recalls of our approved products;
|
•
|
required changes to the processes used in the manufacture of our products, which could increase our manufacturing costs and affect the availability of contract manufacturers we may utilize to assist in such manufacturing;
|
•
|
revocation of approval for our products from the market completely, or within particular therapeutic areas or patient types;
|
•
|
increased timelines or delays in being approved by the FDA or other regulatory bodies; and/or
|
•
|
fewer treatments or product candidates being approved by regulatory bodies.
|
•
|
the product candidate did not demonstrate acceptable clinical trial results even though it demonstrated positive preclinical trial results, for reasons that could include changes in the standard of care of medicine;
|
•
|
the product candidate was not effective or not more effective than currently available therapies in treating a specified condition or illness;
|
•
|
the product candidate was not cost effective in light of existing therapeutics;
|
•
|
the product candidate had harmful side effects in animals or humans;
|
•
|
the necessary regulatory bodies, such as the FDA or EMA, did not approve the product candidate for an intended use;
|
•
|
the product candidate was not economical for us to manufacture and commercialize;
|
•
|
other parties had or may have had proprietary rights relating to our product candidate, such as patent rights, and did not let us sell it on reasonable terms, or at all;
|
•
|
we and certain of our licensees, partners, contracted organizations or independent investigators may have failed to effectively conduct clinical development or clinical manufacturing activities;
|
•
|
the pathway to regulatory approval or reimbursement for product candidates was uncertain or not well-defined; and
|
•
|
the biosimilar product candidate failed to demonstrate the requisite biosimilarity to the applicable reference product, or was otherwise determined by a regulatory authority to not meet applicable standards for approval.
|
•
|
regulatory requirements or action by regulatory agencies or others;
|
•
|
adverse financial or other strategic developments at or affecting the supplier, including bankruptcy;
|
•
|
unexpected demand for or shortage of raw materials, medical devices or components;
|
•
|
failure to comply with our quality standards which results in quality and product failures, product contamination and/or recall;
|
•
|
a material shortage, contamination, recall and/or restrictions on the use of certain biologically derived substances or other raw materials;
|
•
|
discovery of previously unknown or undetected imperfections in raw materials, medical devices or components; and
|
•
|
labor disputes or shortages, including from the effects of health emergencies and natural disasters.
|
•
|
capacity of manufacturing facilities;
|
•
|
contamination by microorganisms or viruses, or foreign particles from the manufacturing process;
|
•
|
natural or other disasters, including hurricanes, earthquakes, volcanoes or fires;
|
•
|
labor disputes or shortages, including the effects of health emergencies or natural disasters;
|
•
|
compliance with regulatory requirements;
|
•
|
changes in forecasts of future demand;
|
•
|
timing and actual number of production runs and production success rates and yields;
|
•
|
updates of manufacturing specifications;
|
•
|
contractual disputes with our suppliers and contract manufacturers;
|
•
|
timing and outcome of product quality testing;
|
•
|
power failures and/or other utility failures;
|
•
|
breakdown, failure, substandard performance or improper installation or operation of equipment; and/or
|
•
|
delays in the ability of the FDA or foreign regulatory agencies to provide us necessary reviews, inspections and approvals, including as a result of a subsequent extended U.S. federal government shutdown.
|
Item 1B.
|
UNRESOLVED STAFF COMMENTS
|
Item 2.
|
PROPERTIES
|
Item 3.
|
LEGAL PROCEEDINGS
|
Item 4.
|
MINE SAFETY DISCLOSURES
|
Item 5.
|
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
|
Amgen vs. Amex Biotech, Amex Pharmaceutical and S&P 500 Indices
|
Comparison of Five-Year Cumulative Total Return
|
Value of Investment of $100 on December 31, 2013
|
|
12/31/2013
|
|
12/31/2014
|
|
12/31/2015
|
|
12/31/2016
|
|
12/31/2017
|
|
12/31/2018
|
Amgen (AMGN)
|
$100.00
|
|
$142.32
|
|
$147.97
|
|
$136.80
|
|
$167.33
|
|
$192.57
|
Amex Biotech (BTK)
|
$100.00
|
|
$147.91
|
|
$164.76
|
|
$133.21
|
|
$183.58
|
|
$184.07
|
Amex Pharmaceutical (DRG)
|
$100.00
|
|
$116.58
|
|
$121.45
|
|
$111.32
|
|
$129.83
|
|
$139.50
|
S&P 500 (SPX)
|
$100.00
|
|
$113.68
|
|
$115.24
|
|
$129.02
|
|
$157.26
|
|
$150.39
|
|
|
Total
number of
shares
purchased
|
|
Average
price paid
per share
(1)
|
|
Total number
of shares
purchased as
part of
publicly
announced
program
|
|
Maximum dollar
value that may
yet be purchased
under the
program
(2)
|
||||||
October 1 - October 31
|
|
4,151,700
|
|
|
$
|
198.37
|
|
|
4,151,700
|
|
|
$
|
2,855,891,358
|
|
November 1 - November 30
|
|
2,461,000
|
|
|
$
|
195.19
|
|
|
2,461,000
|
|
|
$
|
2,375,524,842
|
|
December 1 - December 31
|
|
4,508,700
|
|
|
$
|
190.99
|
|
|
4,508,700
|
|
|
$
|
5,114,429,813
|
|
|
|
11,121,400
|
|
|
$
|
194.67
|
|
|
11,121,400
|
|
|
|
||
January 1 - December 31
|
|
94,473,223
|
|
|
$
|
189.00
|
|
|
94,473,223
|
|
|
|
(1)
|
Average price paid per share includes related expenses.
|
(2)
|
In December 2018, our Board of Directors increased the amount authorized under our stock repurchase program by an additional $3.6 billion.
|
Item 6.
|
SELECTED FINANCIAL DATA
|
|
Years ended December 31,
|
||||||||||||||||||
Consolidated Statements of Income Data:
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In millions, except per-share data)
|
||||||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
|
||||||||||
Product sales
|
$
|
22,533
|
|
|
$
|
21,795
|
|
|
$
|
21,892
|
|
|
$
|
20,944
|
|
|
$
|
19,327
|
|
Other revenues
|
1,214
|
|
|
1,054
|
|
|
1,099
|
|
|
718
|
|
|
736
|
|
|||||
Total revenues
|
$
|
23,747
|
|
|
$
|
22,849
|
|
|
$
|
22,991
|
|
|
$
|
21,662
|
|
|
$
|
20,063
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
||||||||||
Cost of sales
|
$
|
4,101
|
|
|
$
|
4,069
|
|
|
$
|
4,162
|
|
|
$
|
4,227
|
|
|
$
|
4,422
|
|
Research and development
|
$
|
3,737
|
|
|
$
|
3,562
|
|
|
$
|
3,840
|
|
|
$
|
4,070
|
|
|
$
|
4,297
|
|
Selling, general and administrative
|
$
|
5,332
|
|
|
$
|
4,870
|
|
|
$
|
5,062
|
|
|
$
|
4,846
|
|
|
$
|
4,699
|
|
Net income
(1)
|
$
|
8,394
|
|
|
$
|
1,979
|
|
|
$
|
7,722
|
|
|
$
|
6,939
|
|
|
$
|
5,158
|
|
Diluted earnings per share
(1)
|
$
|
12.62
|
|
|
$
|
2.69
|
|
|
$
|
10.24
|
|
|
$
|
9.06
|
|
|
$
|
6.70
|
|
Dividends paid per share
|
$
|
5.28
|
|
|
$
|
4.60
|
|
|
$
|
4.00
|
|
|
$
|
3.16
|
|
|
$
|
2.44
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
As of December 31,
|
||||||||||||||||||
Consolidated Balance Sheets Data:
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
2014
|
||||||||||
|
(In millions)
|
||||||||||||||||||
Total assets
|
$
|
66,416
|
|
|
$
|
79,954
|
|
|
$
|
77,626
|
|
|
$
|
71,449
|
|
|
$
|
68,882
|
|
Total debt
(2)
|
$
|
33,929
|
|
|
$
|
35,342
|
|
|
$
|
34,596
|
|
|
$
|
31,429
|
|
|
$
|
30,588
|
|
Total stockholders’ equity
(3)
|
$
|
12,500
|
|
|
$
|
25,241
|
|
|
$
|
29,875
|
|
|
$
|
28,083
|
|
|
$
|
25,778
|
|
(1)
|
In 2017, we recorded a net charge of $6.1 billion as a result of the 2017 Tax Act. See Part IV—Note 7, Income taxes, to the Consolidated Financial Statements.
|
(2)
|
See Part IV—Note 16, Financing arrangements, to the Consolidated Financial Statements, for discussion of our financing arrangements. In 2015, we issued $3.5 billion of debt and repaid $2.4 billion of debt. In 2014, we issued $4.5 billion of debt and repaid $5.6 billion of debt.
|
(3)
|
Throughout the five years ended
December 31, 2018
, we had a stock repurchase program authorized by the Board of Directors, through which we repurchased
$17.9 billion
,
$3.1 billion
,
$3.0 billion
, $1.9 billion and $0.2 billion, respectively, of Amgen common stock.
|
Item 7.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Year ended December 31, 2018
|
|
Change
|
|
Year ended December 31, 2017
|
|
Change
|
|
Year ended December 31, 2016
|
||||||||
ENBREL
|
$
|
5,014
|
|
|
(8
|
)%
|
|
$
|
5,433
|
|
|
(9
|
)%
|
|
$
|
5,965
|
|
Neulasta
®
|
4,475
|
|
|
(1
|
)%
|
|
4,534
|
|
|
(2
|
)%
|
|
4,648
|
|
|||
Prolia
®
|
2,291
|
|
|
16
|
%
|
|
1,968
|
|
|
20
|
%
|
|
1,635
|
|
|||
Aranesp
®
|
1,877
|
|
|
(9
|
)%
|
|
2,053
|
|
|
(2
|
)%
|
|
2,093
|
|
|||
XGEVA
®
|
1,786
|
|
|
13
|
%
|
|
1,575
|
|
|
3
|
%
|
|
1,529
|
|
|||
Sensipar
®
/Mimpara
®
|
1,774
|
|
|
3
|
%
|
|
1,718
|
|
|
9
|
%
|
|
1,582
|
|
|||
EPOGEN
®
|
1,010
|
|
|
(8
|
)%
|
|
1,096
|
|
|
(15
|
)%
|
|
1,282
|
|
|||
Other products
|
4,306
|
|
|
26
|
%
|
|
3,418
|
|
|
8
|
%
|
|
3,158
|
|
|||
Total product sales
|
$
|
22,533
|
|
|
3
|
%
|
|
$
|
21,795
|
|
|
—
|
%
|
|
$
|
21,892
|
|
Total U.S.
|
$
|
17,429
|
|
|
2
|
%
|
|
$
|
17,131
|
|
|
(1
|
)%
|
|
$
|
17,325
|
|
Total ROW
|
5,104
|
|
|
9
|
%
|
|
4,664
|
|
|
2
|
%
|
|
4,567
|
|
|||
Total product sales
|
$
|
22,533
|
|
|
3
|
%
|
|
$
|
21,795
|
|
|
—
|
%
|
|
$
|
21,892
|
|
|
Year ended December 31, 2018
|
|
Change
|
|
Year ended December 31, 2017
|
|
Change
|
|
Year ended December 31, 2016
|
||||||||
ENBREL — U.S.
|
$
|
4,807
|
|
|
(8
|
)%
|
|
$
|
5,206
|
|
|
(9
|
)%
|
|
$
|
5,719
|
|
ENBREL — Canada
|
207
|
|
|
(9
|
)%
|
|
227
|
|
|
(8
|
)%
|
|
246
|
|
|||
Total ENBREL
|
$
|
5,014
|
|
|
(8
|
)%
|
|
$
|
5,433
|
|
|
(9
|
)%
|
|
$
|
5,965
|
|
|
Year ended December 31, 2018
|
|
Change
|
|
Year ended December 31, 2017
|
|
Change
|
|
Year ended December 31, 2016
|
||||||||
Neulasta
®
— U.S.
|
$
|
3,866
|
|
|
(2
|
)%
|
|
$
|
3,931
|
|
|
—
|
%
|
|
$
|
3,925
|
|
Neulasta
®
— ROW
|
609
|
|
|
1
|
%
|
|
603
|
|
|
(17
|
)%
|
|
723
|
|
|||
Total Neulasta
®
|
$
|
4,475
|
|
|
(1
|
)%
|
|
$
|
4,534
|
|
|
(2
|
)%
|
|
$
|
4,648
|
|
|
Year ended December 31, 2018
|
|
Change
|
|
Year ended December 31, 2017
|
|
Change
|
|
Year ended December 31, 2016
|
||||||||
Prolia
®
— U.S.
|
$
|
1,500
|
|
|
18
|
%
|
|
$
|
1,272
|
|
|
21
|
%
|
|
$
|
1,049
|
|
Prolia
®
— ROW
|
791
|
|
|
14
|
%
|
|
696
|
|
|
19
|
%
|
|
586
|
|
|||
Total Prolia
®
|
$
|
2,291
|
|
|
16
|
%
|
|
$
|
1,968
|
|
|
20
|
%
|
|
$
|
1,635
|
|
|
Year ended December 31, 2018
|
|
Change
|
|
Year ended December 31, 2017
|
|
Change
|
|
Year ended December 31, 2016
|
||||||||
XGEVA
®
— U.S.
|
$
|
1,338
|
|
|
16
|
%
|
|
$
|
1,157
|
|
|
4
|
%
|
|
$
|
1,115
|
|
XGEVA
®
— ROW
|
448
|
|
|
7
|
%
|
|
418
|
|
|
1
|
%
|
|
414
|
|
|||
Total XGEVA
®
|
$
|
1,786
|
|
|
13
|
%
|
|
$
|
1,575
|
|
|
3
|
%
|
|
$
|
1,529
|
|
|
Year ended December 31, 2018
|
|
Change
|
|
Year ended December 31, 2017
|
|
Change
|
|
Year ended December 31, 2016
|
||||||||
Sensipar
®
— U.S.
|
$
|
1,436
|
|
|
5
|
%
|
|
$
|
1,374
|
|
|
11
|
%
|
|
$
|
1,240
|
|
Sensipar
®
/Mimpara
®
— ROW
|
338
|
|
|
(2
|
)%
|
|
344
|
|
|
1
|
%
|
|
342
|
|
|||
Total Sensipar
®
/Mimpara
®
|
$
|
1,774
|
|
|
3
|
%
|
|
$
|
1,718
|
|
|
9
|
%
|
|
$
|
1,582
|
|
|
Year ended December 31, 2018
|
|
Change
|
|
Year ended December 31, 2017
|
|
Change
|
|
Year ended December 31, 2016
|
||||||||
EPOGEN
®
— U.S.
|
$
|
1,010
|
|
|
(8
|
)%
|
|
$
|
1,096
|
|
|
(15
|
)%
|
|
$
|
1,282
|
|
|
Year ended December 31, 2018
|
|
Change
|
|
Year ended December 31, 2017
|
|
Change
|
|
Year ended December 31, 2016
|
||||||||
KYPROLIS
®
— U.S.
|
$
|
583
|
|
|
4
|
%
|
|
$
|
562
|
|
|
1
|
%
|
|
$
|
554
|
|
KYPROLIS
®
— ROW
|
385
|
|
|
41
|
%
|
|
273
|
|
|
98
|
%
|
|
138
|
|
|||
Nplate
®
— U.S.
|
438
|
|
|
12
|
%
|
|
392
|
|
|
12
|
%
|
|
350
|
|
|||
Nplate
®
— ROW
|
279
|
|
|
12
|
%
|
|
250
|
|
|
7
|
%
|
|
234
|
|
|||
Vectibix
®
— U.S.
|
288
|
|
|
15
|
%
|
|
251
|
|
|
10
|
%
|
|
229
|
|
|||
Vectibix
®
— ROW
|
403
|
|
|
3
|
%
|
|
391
|
|
|
2
|
%
|
|
382
|
|
|||
Repatha
®
— U.S.
|
358
|
|
|
59
|
%
|
|
225
|
|
|
*
|
|
|
101
|
|
|||
Repatha
®
— ROW
|
192
|
|
|
*
|
|
|
94
|
|
|
*
|
|
|
40
|
|
|||
NEUPOGEN
®
— U.S.
|
223
|
|
|
(40
|
)%
|
|
369
|
|
|
(31
|
)%
|
|
534
|
|
|||
NEUPOGEN
®
— ROW
|
142
|
|
|
(21
|
)%
|
|
180
|
|
|
(22
|
)%
|
|
231
|
|
|||
Parsabiv
®
— U.S.
|
302
|
|
|
*
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|||
Parsabiv
®
— ROW
|
34
|
|
|
*
|
|
|
5
|
|
|
*
|
|
|
—
|
|
|||
BLINCYTO
®
— U.S.
|
134
|
|
|
18
|
%
|
|
114
|
|
|
34
|
%
|
|
85
|
|
|||
BLINCYTO
®
— ROW
|
96
|
|
|
57
|
%
|
|
61
|
|
|
*
|
|
|
30
|
|
|||
Aimovig
®
— U.S.
|
119
|
|
|
*
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|||
Biosimilars — ROW
|
55
|
|
|
*
|
|
|
—
|
|
|
—
|
%
|
|
—
|
|
|||
Other
— U.S.
|
85
|
|
|
25
|
%
|
|
68
|
|
|
13
|
%
|
|
60
|
|
|||
Other — ROW
|
190
|
|
|
4
|
%
|
|
183
|
|
|
(4
|
)%
|
|
190
|
|
|||
Total other product sales
|
$
|
4,306
|
|
|
26
|
%
|
|
$
|
3,418
|
|
|
8
|
%
|
|
$
|
3,158
|
|
Total U.S. — other products
|
$
|
2,530
|
|
|
|
|
|
$
|
1,981
|
|
|
|
|
|
$
|
1,913
|
|
Total ROW — other products
|
1,776
|
|
|
|
|
|
1,437
|
|
|
|
|
|
1,245
|
|
|||
Total other product sales
|
$
|
4,306
|
|
|
|
|
|
$
|
3,418
|
|
|
|
|
|
$
|
3,158
|
|
Category
|
|
Description
|
Research and early pipeline
|
|
R&D expenses incurred in activities substantially in support of early research through the completion of phase 1 clinical trials, including drug discovery, toxicology, pharmacokinetics and drug metabolism, and process development.
|
Later-stage clinical programs
|
|
R&D expenses incurred in or related to phase 2 and phase 3 clinical programs intended to result in registration of a new product or a new indication for an existing product in the United States or the EU.
|
Marketed products
|
|
R&D expenses incurred in support of the Company’s marketed products that are authorized to be sold in the United States or the EU. Includes clinical trials designed to gather information on product safety (certain of which may be required by regulatory authorities) and their product characteristics after regulatory approval has been obtained, as well as the costs of obtaining regulatory approval of a product in a new market after approval in either the United States or the EU has been obtained.
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Research and early pipeline
|
$
|
1,201
|
|
|
$
|
972
|
|
|
$
|
1,039
|
|
Later-stage clinical programs
|
1,034
|
|
|
879
|
|
|
1,054
|
|
|||
Marketed products
|
1,502
|
|
|
1,711
|
|
|
1,747
|
|
|||
Total R&D expense
|
$
|
3,737
|
|
|
$
|
3,562
|
|
|
$
|
3,840
|
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Interest expense, net
|
$
|
1,392
|
|
|
$
|
1,304
|
|
|
$
|
1,260
|
|
Interest and other income, net
|
$
|
674
|
|
|
$
|
928
|
|
|
$
|
629
|
|
Provision for income taxes
|
$
|
1,151
|
|
|
$
|
7,618
|
|
|
$
|
1,441
|
|
Effective tax rate
|
12.1
|
%
|
|
79.4
|
%
|
|
15.7
|
%
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Cash, cash equivalents and marketable securities
|
$
|
29,304
|
|
|
$
|
41,678
|
|
Total assets
|
$
|
66,416
|
|
|
$
|
79,954
|
|
Current portion of long-term debt
|
$
|
4,419
|
|
|
$
|
1,152
|
|
Long-term debt
|
$
|
29,510
|
|
|
$
|
34,190
|
|
Stockholders’ equity
|
$
|
12,500
|
|
|
$
|
25,241
|
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net cash provided by operating activities
|
$
|
11,296
|
|
|
$
|
11,177
|
|
|
$
|
10,354
|
|
Net cash provided by (used in) investing activities
|
$
|
14,339
|
|
|
$
|
(4,024
|
)
|
|
$
|
(8,658
|
)
|
Net cash used in financing activities
|
$
|
(22,490
|
)
|
|
$
|
(6,594
|
)
|
|
$
|
(2,599
|
)
|
|
|
Payments due by period as of December 31, 2018
|
||||||||||||||||||
Contractual obligations
|
|
Total
|
|
Year 1
|
|
Years 2 and 3
|
|
Years 4 and 5
|
|
Years 6
and beyond
|
||||||||||
Long-term debt obligations
(1) (2) (3)
|
|
$
|
54,276
|
|
|
$
|
5,856
|
|
|
$
|
8,777
|
|
|
$
|
7,444
|
|
|
$
|
32,199
|
|
Operating lease obligations
(4)
|
|
569
|
|
|
164
|
|
|
239
|
|
|
120
|
|
|
46
|
|
|||||
Purchase obligations
(5)
|
|
1,153
|
|
|
609
|
|
|
305
|
|
|
124
|
|
|
115
|
|
|||||
U.S. repatriation tax
(6)
|
|
6,739
|
|
|
586
|
|
|
1,172
|
|
|
1,685
|
|
|
3,296
|
|
|||||
Unrecognized tax benefits (UTBs)
(7)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Total contractual obligations
|
|
$
|
62,737
|
|
|
$
|
7,215
|
|
|
$
|
10,493
|
|
|
$
|
9,373
|
|
|
$
|
35,656
|
|
(1)
|
Long-term debt obligations include future interest payments on our fixed-rate obligations at the contractual coupon rates. To achieve a desired mix of fixed-rate and floating-rate debt, we enter into interest rate swap contracts that effectively convert a fixed-rate interest coupon for certain of our debt issuances to a floating LIBOR-based coupon over the terms of the related hedge contracts. We used an interest rate forward curve as of
December 31, 2018
, in computing net amounts to be paid or received under our interest rate swap contracts, which resulted in an aggregate net increase in future interest payments of $77 million. See Part IV—Note 16, Financing arrangements,
to the Consolidated Financial Statements.
|
(2)
|
Long-term debt obligations include future interest payments on our LIBOR-based variable-rate obligations. We used an interest rate forward curve as of
December 31, 2018
, in computing the LIBOR-based portion of interest payments on these debt obligations. See Part IV—Note 16, Financing arrangements,
to the Consolidated Financial Statements.
|
(3)
|
Long-term debt obligations include contractual interest payments and principal repayment of our foreign-denominated debt obligations. In order to hedge our exposure to foreign currency exchange rate risk associated with certain of our euro-, pound-sterling- and Swiss-franc-denominated long-term debt, we enter into cross-currency swap contracts that effectively convert interest payments and principal repayment on this debt from euros, pounds sterling and Swiss francs to U.S. dollars. For purposes of this table, we used the contracted exchange rates in the cross-currency swap contracts to compute the net amounts of future interest payments and principal repayments on this debt. See Part IV—Note 19, Derivative instruments, to the Consolidated Financial Statements.
|
(4)
|
Operating lease obligations exclude
$203 million
of future receipts under noncancelable subleases of abandoned facilities.
|
(5)
|
Purchase obligations relate primarily to: (i) R&D commitments (including those related to clinical trials) for new and existing products; (ii) capital expenditures; and (iii) open purchase orders for the acquisition of goods and services in the ordinary course of business. Our obligation to pay certain of these amounts may be reduced based on certain future events.
|
(6)
|
Under the 2017 Tax Act, we elected to pay the repatriation tax related primarily to our prior indefinitely invested earnings of our foreign operations in eight annual installments. See Part IV—Note 7, Income taxes, to the Consolidated Financial Statements.
|
(7)
|
Liabilities for UTBs (net of foreign tax credits and federal tax benefit of state taxes) and related accrued interest and penalties of $2.6 billion as of
December 31, 2018
, are not included in the table above because, due to their nature, there is a high degree of uncertainty regarding the timing of future cash outflows and other events that extinguish these liabilities.
|
|
Rebates
|
|
Chargebacks
|
|
Other deductions
|
|
Total
|
||||||||
Balance as of December 31, 2015
|
$
|
1,119
|
|
|
$
|
273
|
|
|
$
|
94
|
|
|
$
|
1,486
|
|
Amounts charged against product sales
|
3,479
|
|
|
5,270
|
|
|
905
|
|
|
9,654
|
|
||||
Payments
|
(3,181
|
)
|
|
(5,201
|
)
|
|
(884
|
)
|
|
(9,266
|
)
|
||||
Balance as of December 31, 2016
|
1,417
|
|
|
342
|
|
|
115
|
|
|
1,874
|
|
||||
Amounts charged against product sales
|
4,909
|
|
|
6,098
|
|
|
992
|
|
|
11,999
|
|
||||
Payments
|
(4,459
|
)
|
|
(6,168
|
)
|
|
(999
|
)
|
|
(11,626
|
)
|
||||
Balance as of December 31, 2017
|
1,867
|
|
|
272
|
|
|
108
|
|
|
2,247
|
|
||||
Amounts charged against product sales
|
6,180
|
|
|
6,926
|
|
|
1,180
|
|
|
14,286
|
|
||||
Payments
|
(5,458
|
)
|
|
(6,744
|
)
|
|
(1,161
|
)
|
|
(13,363
|
)
|
||||
Balance as of December 31, 2018
|
$
|
2,589
|
|
|
$
|
454
|
|
|
$
|
127
|
|
|
$
|
3,170
|
|
•
|
determining the timing and expected costs to complete in-process projects, taking into account the stage of completion at the acquisition date;
|
•
|
projecting the probability and timing of obtaining marketing approval from the FDA and other regulatory agencies for product candidates;
|
•
|
estimating the timing of and future net cash flows from product sales resulting from completed products and in-process projects; and
|
•
|
developing appropriate discount rates to calculate the present values of the cash flows.
|
Item 7A.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
Item 8.
|
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
|
Item 9.
|
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
|
Item 9A.
|
CONTROLS AND PROCEDURES
|
Item 9B.
|
OTHER INFORMATION
|
Item 10.
|
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
|
Item 11.
|
EXECUTIVE COMPENSATION
|
Item 12.
|
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
|
(1)
|
The Amended and Restated 2009 Equity Incentive Plan employs a fungible share counting formula for determining the number of shares available for issuance under the plan. In accordance with this formula, each option or stock appreciation right counts as one share, while each restricted stock unit, performance unit or dividend equivalent counts as 1.9 shares. The number under column (a) represents the actual number of shares issuable under our outstanding awards without giving effect to the fungible share counting formula. The number under column (c) represents the number of shares available for issuance under this plan based on each such available share counting as one share. Commencing with the grants made in April 2012, RSUs and performance units accrue dividend equivalents that are payable in shares only to the extent and when the underlying RSUs vest or underlying performance units have been earned and the related shares are issued to the grantee. The performance units granted under this plan are earned based on the accomplishment of specified performance goals at the end of their respective three-year performance periods; the number of performance units granted represent target performance and the maximum number of units that could be earned based on our performance is 200% of the performance units granted in 2016, 2017 and 2018.
|
(2)
|
This plan has terminated as to future grants. The number under column (a) with respect to this plan includes 17,030 shares issuable upon the settlement of deferred RSUs (including 2,577 related dividend equivalents).
|
(3)
|
The Amgen Profit Sharing Plan for Employees in Ireland (the Profit Sharing Plan) was approved by the Board of Directors on July 28, 2011. The Profit Sharing Plan permits eligible employees of the Company’s subsidiaries located in Ireland who participate in the Profit Sharing Plan to apply a portion of their qualifying bonus and salary to the purchase the Company’s common stock on the open market at the market price by a third-party trustee as described in the Profit Sharing Plan.
|
Item 13.
|
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE
|
Item 14.
|
PRINCIPAL ACCOUNTING FEES AND SERVICES
|
Item 15.
|
EXHIBITS, FINANCIAL STATEMENT SCHEDULES
|
(a)1.
|
Index to Financial Statements
|
|
Page
number
|
Report of Independent Registered Public Accounting Firm
|
|
|
|
Consolidated Statements of Income for each of the three years in the period ended December 31, 2018
|
|
|
|
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2018
|
|
|
|
Consolidated Balance Sheets as of December 31, 2018 and 2017
|
|
|
|
Consolidated Statements of Stockholders’ Equity for each of the three years in the period ended December 31, 2018
|
|
|
|
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2018
|
|
|
|
Notes to Consolidated Financial Statements
|
(a)2.
|
Index to Financial Statement Schedules
|
|
Page
number
|
II. Valuation and Qualifying Accounts
|
(a)3.
|
Exhibits
|
Exhibit No.
|
|
Description
|
3.1
|
|
Restated Certificate of Incorporation of Amgen Inc.
(As Restated March 6, 2013.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 on May 3, 2013 and incorporated herein by reference.)
|
|
|
|
3.2
|
|
Amended and Restated Bylaws of Amgen Inc.
(As Amended and Restated February 15, 2016.) (Filed as an exhibit to Form 8-K on February 17, 2016 and incorporated herein by reference.)
|
|
|
|
4.1
|
|
Form of stock certificate for the common stock, par value $.0001 of the Company.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1997 on May 14, 1997 and incorporated herein by reference.)
|
|
|
|
4.2
|
|
Form of Indenture, dated January 1, 1992. (Filed as an exhibit to Form S-3 Registration Statement filed on December 19, 1991 and incorporated herein by reference.)
|
|
|
|
4.3
|
|
Agreement of Resignation, Appointment and Acceptance dated February 15, 2008.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2007 on February 28, 2008 and incorporated herein by reference.)
|
|
|
|
4.4
|
|
First Supplemental Indenture, dated February 26, 1997.
(Filed as an exhibit to Form 8-K on March 14, 1997 and incorporated herein by reference.)
|
|
|
|
4.5
|
|
8-1/8% Debentures due April 1, 2097.
(Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)
|
|
|
|
4.6
|
|
Officer’s Certificate of Amgen Inc., dated April 8, 1997, establishing a series of securities entitled “8 1/8% Debentures due April 1, 2097.”
(Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)
|
|
|
|
4.25
|
|
Officer’s Certificate of Amgen Inc., dated as of June 14, 2016, including forms of the Company’s 4.563% Senior Notes due 2048 and 4.663% Senior Notes due 2051.
(Filed as an exhibit to Form 8-K on June 14, 2016 and incorporated herein by reference.)
|
|
|
|
4.26
|
|
Officer’s Certificate of Amgen Inc., dated as of August 19, 2016, including forms of the Company’s 1.850% Senior Notes due 2021, 2.250% Senior Notes due 2023 and 2.600% Senior Notes due 2026.
(Filed as an exhibit to Form 8-K on August 19, 2016 and incorporated herein by reference.)
|
|
|
|
4.27
|
|
Officer’s Certificate of Amgen Inc., dated as of May 11, 2017 including forms of the Company’s Senior Floating Rate Notes due 2019, Senior Floating Rate Notes due 2020, 1.900% Senior Notes due 2019, 2.200% Senior Notes due 2020 and 2.650% Senior Notes due 2022.
(Filed as an exhibit to Form 8-K on May 11, 2017 and incorporated herein by reference.)
|
|
|
|
4.28
|
|
Officer’s Certificate of Amgen Inc., dated as of November 2, 2017, including in the form of the Company’s 3.200% Senior Notes due 2027.
(Filed as an exhibit to Form 8-K on November 2, 2017 and incorporated by reference.)
|
|
|
|
10.1+
|
|
Amgen Inc. Amended and Restated 2009 Equity Incentive Plan.
(Filed as Appendix C to the Definitive Proxy Statement on Schedule 14A on April 8, 2013 and incorporated herein by reference.)
|
|
|
|
10.2+
|
|
First Amendment to Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, effective March 4, 2015.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2015 on April 27, 2015 and incorporated herein by reference.)
|
|
|
|
10.3+
|
|
Second Amendment to Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, effective March 2, 2016.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2016 on May 2, 2016 and incorporated herein by reference.)
|
|
|
|
10.4+*
|
|
|
|
|
|
10.5+*
|
|
|
|
|
|
10.6+
|
|
Amgen Inc. 2009 Performance Award Program. (As Amended on December 12, 2017.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.7+*
|
|
|
|
|
|
10.8+
|
|
Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on October 24, 2017.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.9+
|
|
Form of Grant of Non-Qualified Stock Option Agreement for the Amgen Inc. 2009 Director Equity Incentive Program.
(Filed as an exhibit to Form 8-K on May 8, 2009 and incorporated herein by reference.)
|
|
|
|
10.10+
|
|
Form of Restricted Stock Unit Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on October 24, 2017.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.11+
|
|
Form of Cash-Settled Restricted Stock Unit Agreement for the Amgen 2009 Director Equity Incentive Program.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2017 on February 13, 2018 and incorporated herein by reference.)
|
|
|
|
10.12+
|
|
Amgen Inc. Supplemental Retirement Plan. (As Amended and Restated effective October 16, 2013.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)
|
|
|
|
10.13+
|
|
First Amendment to the Amgen Inc. Supplemental Retirement Plan, effective October 14, 2016.
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2016 on October 28, 2016 and incorporated herein by reference.)
|
|
|
|
10.14+
|
|
Amended and Restated Amgen Change of Control Severance Plan. (As Amended and Restated effective December 9, 2010 and subsequently amended effective March 2, 2011.)
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 on May 10, 2011 and incorporated herein by reference.)
|
|
|
|
10.15+
|
|
Amgen Inc. Executive Incentive Plan. (As Amended and Restated effective January 1, 2009.)
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.)
|
|
|
|
10.16+
|
|
First Amendment to the Amgen Inc. Executive Incentive Plan, effective December 13, 2012.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.)
|
|
|
|
10.17+
|
|
Second Amendment to the Amgen Inc. Executive Incentive Plan, effective January 1, 2017.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)
|
|
|
|
10.18+
|
|
Amgen Nonqualified Deferred Compensation Plan. (As Amended and Restated effective October 16, 2013.)
(Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)
|
|
|
|
10.19+
|
|
First Amendment to the Amgen Nonqualified Deferred Compensation Plan, effective October 14, 2016.
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2016 on October 28, 2016 and incorporated herein by reference.)
|
|
|
|
10.20+
|
|
Agreement between Amgen Inc. and David W. Meline, effective July 21, 2014.
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2014 on October 29, 2014 and incorporated herein by reference.)
|
|
|
|
10.21+
|
|
Agreement between Amgen Inc. and Jonathan Graham, dated May 11, 2015.
(Filed as an exhibit to Form 10-Q/A for the quarter ended June 30, 2015 on August 6, 2015 and incorporated herein by reference.)
|
|
|
|
10.22+
|
|
Agreement between Amgen Inc. and Lori Johnston, dated October 25, 2016.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)
|
|
|
|
10.23+
|
|
Agreement between Amgen Inc. and Murdo Gordon, dated July 25, 2018.
(Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2018 on October 31, 2018 and incorporated herein by reference.)
|
|
|
|
10.24
|
|
Amended and Restated Credit Agreement, dated July 30, 2014, among Amgen Inc., the Banks therein named, Citibank, N.A., as administrative agent, and JPMorgan Chase Bank, N.A., as syndication agent (the “Credit Agreement”).
(Filed as an exhibit to Form 8-K on July 30, 2014 and incorporated herein by reference.)
|
|
|
|
10.25
|
|
Amendment No. 1 to the Credit Agreement, dated March 9, 2018, among Amgen Inc., the Banks therein named, and Citibank, N.A., as administrative agent.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2018 on April 25, 2018 and incorporated herein by reference.)
|
|
|
|
10.26
|
|
Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited dated May 10, 2002 (portions of the exhibit have been omitted pursuant to a request for confidential treatment) and Amendment No. 1, effective June 9, 2003, to Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment).
(Filed as an exhibit to Form 10-K/A for the year ended December 31, 2012 on July 31, 2013 and incorporated herein by reference.)
|
|
|
|
10.27
|
|
Amendment No. 2 to Collaboration and License Agreement, effective November 14, 2016, between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment).
(Filed as an exhibit to Form 10-K for the year ended December 31, 2016 on February 14, 2017 and incorporated herein by reference.)
|
|
|
|
10.28
|
|
Collaboration Agreement, dated April 22, 1994, by and between Bayer Corporation (formerly Miles, Inc.) and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 by Onyx Pharmaceuticals, Inc. on May 10, 2011 and incorporated herein by reference.)
|
|
|
|
10.29
|
|
Amendment to Collaboration Agreement, dated April 24, 1996, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)
|
|
|
|
10.30
|
|
Amendment to Collaboration Agreement, dated February 1, 1999, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)
|
|
|
|
10.31
|
|
Settlement Agreement and Release, dated October 11, 2011, by and between Bayer Corporation, Bayer AG, Bayer HealthCare LLC and Bayer Pharma AG and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)
|
|
|
|
10.32
|
|
Fourth Amendment to Collaboration Agreement, dated October 11, 2011, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)
|
|
|
|
10.33
|
|
Side Letter Regarding Collaboration Agreement, dated May 29, 2015, by and between Bayer HealthCare LLC and Onyx Pharmaceuticals, Inc.
(Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2015 on August 5, 2015 and incorporated herein by reference.)
|
|
|
|
10.34
|
|
Sourcing and Supply Agreement, dated January 6, 2017, by and between Amgen USA Inc., a wholly owned subsidiary of Amgen Inc., and DaVita Inc.
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2017 on April 27, 2017 and incorporated herein by reference.)
|
|
|
|
10.35
|
|
Exclusive License and Collaboration Agreement, dated August 28, 2015, by and between Amgen Inc. and Novartis Pharma AG
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
|
|
|
|
10.36
|
|
Amendment No. 1 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
|
|
|
|
10.37
|
|
Amendment No. 2 to the Exclusive License and Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
|
|
|
|
10.38
|
|
Collaboration Agreement, dated April 21, 2017, by and between Amgen Inc. and Novartis Pharma AG
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2017 on July 26, 2017 and incorporated herein by reference.)
|
|
|
|
10.39
|
|
Amendment No. 1 to the Collaboration Agreement, dated March 20, 2018, by and between Novartis Pharma AG and Amgen Inc.
(portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2018 on April 25, 2018 and incorporated herein by reference.)
|
|
|
|
21*
|
|
|
|
|
|
23
|
|
Consent of the Independent Registered Public Accounting Firm. The consent is set forth on page 74 of this Annual Report on the 10-K.
|
|
|
|
24
|
|
Power of Attorney. The Power of Attorney is set forth on page 75 of this Annual Report on Form 10-K.
|
|
|
|
31*
|
|
|
|
|
|
32**
|
|
|
|
|
|
101.INS*
|
|
XBRL Instance Document.
|
|
|
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document.
|
|
|
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document.
|
|
|
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document.
|
|
|
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document.
|
|
|
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
Item 16.
|
FORM 10-K SUMMARY
|
|
|
AMGEN INC.
|
||
|
|
(Registrant)
|
||
|
|
|
|
|
Date:
|
February 13, 2019
|
By:
|
|
/
S
/ DAVID W. MELINE
|
|
|
|
|
David W. Meline
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
•
|
Registration Statement (Form S-8 No. 333-159377) pertaining to the Amgen Inc. 2009 Equity Incentive Plan;
|
•
|
Registration Statement (Form S-8 No. 33-39183) pertaining to the Amended and Restated Employee Stock Purchase Plan;
|
•
|
Registration Statements (Form S-8 No. 33-39104, as amended by Form S-8 Nos. 333-144581 and 333-216719) pertaining to the Amended and Restated Amgen Retirement and Savings Plan (formerly known as the Amgen Retirement and Savings Plan);
|
•
|
Registration Statements (Form S-8 Nos. 33-47605, 333-144580 and 333-216715) pertaining to the Retirement and Savings Plan for Amgen Manufacturing, Limited (formerly known as the Retirement and Savings Plan for Amgen Manufacturing, Inc.);
|
•
|
Registration Statements (Form S-8 Nos. 333-81284, 333-177868 and 333-216723) pertaining to the Amgen Nonqualified Deferred Compensation Plan;
|
•
|
Registration Statement (Form S-3 No. 333-216060) relating to debt securities, common stock, preferred stock, warrants to purchase debt securities, common stock, preferred stock or depositary shares, rights to purchase common stock or preferred stock, securities purchase contracts, securities purchase units and depositary shares of Amgen Inc. and in the related Prospectus; and
|
•
|
Registration Statement (Form S-8 No. 333-176240) pertaining to the Amgen Profit Sharing Plan for Employees in Ireland;
|
Signature
|
|
Title
|
|
Date
|
|
|
|
|
|
/S/ ROBERT A. BRADWAY
|
|
Chairman of the Board, Chief Executive Officer
and President, and Director (Principal Executive Officer) |
|
2/13/2019
|
Robert A. Bradway
|
|
|
|
|
|
|
|
|
|
/S/ DAVID W. MELINE
|
|
Executive Vice President and
Chief Financial Officer
(Principal Financial and Accounting Officer)
|
|
2/13/2019
|
David W. Meline
|
|
|
|
|
|
|
|
|
|
/S/ WANDA M. AUSTIN
|
|
Director
|
|
2/13/2019
|
Wanda M. Austin
|
|
|
|
|
|
|
|
|
|
/S/ BRIAN J. DRUKER
|
|
Director
|
|
2/13/2019
|
Brian J. Druker
|
|
|
|
|
|
|
|
|
|
/S/ ROBERT A. ECKERT
|
|
Director
|
|
2/13/2019
|
Robert A. Eckert
|
|
|
|
|
|
|
|
|
|
/S/ GREG C. GARLAND
|
|
Director
|
|
2/13/2019
|
Greg C. Garland
|
|
|
|
|
|
|
|
|
|
/S/ FRED HASSAN
|
|
Director
|
|
2/13/2019
|
Fred Hassan
|
|
|
|
|
|
|
|
|
|
/S/ REBECCA M. HENDERSON
|
|
Director
|
|
2/13/2019
|
Rebecca M. Henderson
|
|
|
|
|
|
|
|
|
|
/S/ FRANK C. HERRINGER
|
|
Director
|
|
2/13/2019
|
Frank C. Herringer
|
|
|
|
|
|
|
|
|
|
/S/ CHARLES M. HOLLEY, JR.
|
|
Director
|
|
2/13/2019
|
Charles M. Holley, Jr.
|
|
|
|
|
|
|
|
|
|
/S/ TYLER JACKS
|
|
Director
|
|
2/13/2019
|
Tyler Jacks
|
|
|
|
|
|
|
|
|
|
/S/ ELLEN J. KULLMAN
|
|
Director
|
|
2/13/2019
|
Ellen J. Kullman
|
|
|
|
|
|
|
|
|
|
/S/ RONALD D. SUGAR
|
|
Director
|
|
2/13/2019
|
Ronald D. Sugar
|
|
|
|
|
|
|
|
|
|
/S/ R. SANDERS WILLIAMS
|
|
Director
|
|
2/13/2019
|
R. Sanders Williams
|
|
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Revenues:
|
|
|
|
|
|
||||||
Product sales
|
$
|
22,533
|
|
|
$
|
21,795
|
|
|
$
|
21,892
|
|
Other revenues
|
1,214
|
|
|
1,054
|
|
|
1,099
|
|
|||
Total revenues
|
23,747
|
|
|
22,849
|
|
|
22,991
|
|
|||
|
|
|
|
|
|
||||||
Operating expenses:
|
|
|
|
|
|
||||||
Cost of sales
|
4,101
|
|
|
4,069
|
|
|
4,162
|
|
|||
Research and development
|
3,737
|
|
|
3,562
|
|
|
3,840
|
|
|||
Selling, general and administrative
|
5,332
|
|
|
4,870
|
|
|
5,062
|
|
|||
Other
|
314
|
|
|
375
|
|
|
133
|
|
|||
Total operating expenses
|
13,484
|
|
|
12,876
|
|
|
13,197
|
|
|||
|
|
|
|
|
|
||||||
Operating income
|
10,263
|
|
|
9,973
|
|
|
9,794
|
|
|||
|
|
|
|
|
|
||||||
Interest expense, net
|
1,392
|
|
|
1,304
|
|
|
1,260
|
|
|||
Interest and other income, net
|
674
|
|
|
928
|
|
|
629
|
|
|||
|
|
|
|
|
|
||||||
Income before income taxes
|
9,545
|
|
|
9,597
|
|
|
9,163
|
|
|||
|
|
|
|
|
|
||||||
Provision for income taxes
|
1,151
|
|
|
7,618
|
|
|
1,441
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
8,394
|
|
|
$
|
1,979
|
|
|
$
|
7,722
|
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
12.70
|
|
|
$
|
2.71
|
|
|
$
|
10.32
|
|
Diluted
|
$
|
12.62
|
|
|
$
|
2.69
|
|
|
$
|
10.24
|
|
|
|
|
|
|
|
||||||
Shares used in the calculation of earnings per share:
|
|
|
|
|
|
||||||
Basic
|
661
|
|
|
731
|
|
|
748
|
|
|||
Diluted
|
665
|
|
|
735
|
|
|
754
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
8,394
|
|
|
$
|
1,979
|
|
|
$
|
7,722
|
|
Other comprehensive (loss) income, net of reclassification adjustments and taxes:
|
|
|
|
|
|
|
|
|
|||
(Losses) gains on foreign currency translation
|
(141
|
)
|
|
81
|
|
|
(99
|
)
|
|||
Gains (losses) on cash flow hedges
|
247
|
|
|
(288
|
)
|
|
(15
|
)
|
|||
(Losses) gains on available-for-sale securities
|
(185
|
)
|
|
(6
|
)
|
|
122
|
|
|||
Other
|
(2
|
)
|
|
5
|
|
|
1
|
|
|||
Other comprehensive (loss) income, net of tax
|
(81
|
)
|
|
(208
|
)
|
|
9
|
|
|||
Comprehensive income
|
$
|
8,313
|
|
|
$
|
1,771
|
|
|
$
|
7,731
|
|
|
2018
|
|
2017
|
||||
ASSETS
|
|||||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
6,945
|
|
|
$
|
3,800
|
|
Marketable securities
|
22,359
|
|
|
37,878
|
|
||
Trade receivables, net
|
3,580
|
|
|
3,237
|
|
||
Inventories
|
2,940
|
|
|
2,834
|
|
||
Other current assets
|
1,794
|
|
|
1,727
|
|
||
Total current assets
|
37,618
|
|
|
49,476
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
4,958
|
|
|
4,989
|
|
||
Intangible assets, net
|
7,443
|
|
|
8,609
|
|
||
Goodwill
|
14,699
|
|
|
14,761
|
|
||
Other assets
|
1,698
|
|
|
2,119
|
|
||
Total assets
|
$
|
66,416
|
|
|
$
|
79,954
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|||||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
1,207
|
|
|
$
|
1,352
|
|
Accrued liabilities
|
7,862
|
|
|
6,516
|
|
||
Current portion of long-term debt
|
4,419
|
|
|
1,152
|
|
||
Total current liabilities
|
13,488
|
|
|
9,020
|
|
||
|
|
|
|
||||
Long-term debt
|
29,510
|
|
|
34,190
|
|
||
Long-term deferred tax liabilities
|
864
|
|
|
1,166
|
|
||
Long-term tax liabilities
|
8,770
|
|
|
9,099
|
|
||
Other noncurrent liabilities
|
1,284
|
|
|
1,238
|
|
||
|
|
|
|
||||
Contingencies and commitments
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Common stock and additional paid-in capital; $0.0001 par value per share; 2,750.0 shares authorized; outstanding—629.6 shares in 2018 and 722.2 shares in 2017
|
31,246
|
|
|
30,992
|
|
||
Accumulated deficit
|
(17,977
|
)
|
|
(5,072
|
)
|
||
Accumulated other comprehensive loss
|
(769
|
)
|
|
(679
|
)
|
||
Total stockholders’ equity
|
12,500
|
|
|
25,241
|
|
||
Total liabilities and stockholders’ equity
|
$
|
66,416
|
|
|
$
|
79,954
|
|
|
Number
of shares
of common
stock
|
|
Common
stock and
additional
paid-in capital
|
|
Accumulated
deficit
|
|
Accumulated
other
comprehensive
loss
|
|
Total
|
|||||||||
Balance as of December 31, 2015
|
754.0
|
|
|
$
|
30,649
|
|
|
$
|
(2,086
|
)
|
|
$
|
(480
|
)
|
|
$
|
28,083
|
|
Net income
|
—
|
|
|
—
|
|
|
7,722
|
|
|
—
|
|
|
7,722
|
|
||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
9
|
|
|
9
|
|
||||
Dividends declared on common stock ($4.15 per share)
|
—
|
|
|
—
|
|
|
(3,120
|
)
|
|
—
|
|
|
(3,120
|
)
|
||||
Issuance of common stock in connection with the Company’s equity award programs
|
3.9
|
|
|
55
|
|
|
—
|
|
|
—
|
|
|
55
|
|
||||
Stock-based compensation expense
|
—
|
|
|
342
|
|
|
—
|
|
|
—
|
|
|
342
|
|
||||
Tax impact related to employee stock-based compensation expense
|
—
|
|
|
(262
|
)
|
|
73
|
|
|
—
|
|
|
(189
|
)
|
||||
Repurchases of common stock
|
(19.7
|
)
|
|
—
|
|
|
(3,027
|
)
|
|
—
|
|
|
(3,027
|
)
|
||||
Balance as of December 31, 2016
|
738.2
|
|
|
30,784
|
|
|
(438
|
)
|
|
(471
|
)
|
|
29,875
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
1,979
|
|
|
—
|
|
|
1,979
|
|
||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(208
|
)
|
|
(208
|
)
|
||||
Dividends declared on common stock ($4.77 per share)
|
—
|
|
|
—
|
|
|
(3,487
|
)
|
|
—
|
|
|
(3,487
|
)
|
||||
Issuance of common stock in connection with the Company’s equity award programs
|
2.5
|
|
|
52
|
|
|
—
|
|
|
—
|
|
|
52
|
|
||||
Stock-based compensation expense
|
—
|
|
|
347
|
|
|
—
|
|
|
—
|
|
|
347
|
|
||||
Tax impact related to employee stock-based compensation expense
|
—
|
|
|
(191
|
)
|
|
—
|
|
|
—
|
|
|
(191
|
)
|
||||
Repurchases of common stock
|
(18.5
|
)
|
|
—
|
|
|
(3,126
|
)
|
|
—
|
|
|
(3,126
|
)
|
||||
Balance as of December 31, 2017
|
722.2
|
|
|
30,992
|
|
|
(5,072
|
)
|
|
(679
|
)
|
|
25,241
|
|
||||
Cumulative effect of changes in accounting principles, net of tax
|
—
|
|
|
—
|
|
|
38
|
|
|
(9
|
)
|
|
29
|
|
||||
Net income
|
—
|
|
|
—
|
|
|
8,394
|
|
|
—
|
|
|
8,394
|
|
||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(81
|
)
|
|
(81
|
)
|
||||
Dividends declared on common stock ($5.41 per share)
|
—
|
|
|
—
|
|
|
(3,482
|
)
|
|
—
|
|
|
(3,482
|
)
|
||||
Issuance of common stock in connection with the Company’s equity award programs
|
1.9
|
|
|
56
|
|
|
—
|
|
|
—
|
|
|
56
|
|
||||
Stock-based compensation expense
|
—
|
|
|
327
|
|
|
—
|
|
|
—
|
|
|
327
|
|
||||
Tax impact related to employee stock-based compensation expense
|
—
|
|
|
(129
|
)
|
|
—
|
|
|
—
|
|
|
(129
|
)
|
||||
Repurchases of common stock
|
(94.5
|
)
|
|
—
|
|
|
(17,855
|
)
|
|
—
|
|
|
(17,855
|
)
|
||||
Balance as of December 31, 2018
|
629.6
|
|
|
$
|
31,246
|
|
|
$
|
(17,977
|
)
|
|
$
|
(769
|
)
|
|
$
|
12,500
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
8,394
|
|
|
$
|
1,979
|
|
|
$
|
7,722
|
|
Depreciation and amortization
|
1,946
|
|
|
1,955
|
|
|
2,105
|
|
|||
Stock-based compensation expense
|
311
|
|
|
329
|
|
|
311
|
|
|||
Deferred income taxes
|
(363
|
)
|
|
(1,330
|
)
|
|
183
|
|
|||
Other items, net
|
386
|
|
|
334
|
|
|
32
|
|
|||
Changes in operating assets and liabilities, net of acquisitions:
|
|
|
|
|
|
||||||
Trade receivables, net
|
(378
|
)
|
|
(58
|
)
|
|
(214
|
)
|
|||
Inventories
|
(3
|
)
|
|
133
|
|
|
(80
|
)
|
|||
Other assets
|
35
|
|
|
(24
|
)
|
|
(128
|
)
|
|||
Accounts payable
|
(143
|
)
|
|
424
|
|
|
(44
|
)
|
|||
Accrued income taxes, net
|
(361
|
)
|
|
523
|
|
|
(301
|
)
|
|||
Long-term tax liabilities
|
258
|
|
|
6,681
|
|
|
445
|
|
|||
Other liabilities
|
1,214
|
|
|
231
|
|
|
323
|
|
|||
Net cash provided by operating activities
|
11,296
|
|
|
11,177
|
|
|
10,354
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of marketable securities
|
(18,741
|
)
|
|
(33,607
|
)
|
|
(28,094
|
)
|
|||
Proceeds from sales of marketable securities
|
28,356
|
|
|
24,240
|
|
|
17,958
|
|
|||
Proceeds from maturities of marketable securities
|
5,412
|
|
|
6,174
|
|
|
2,459
|
|
|||
Purchases of property, plant and equipment
|
(738
|
)
|
|
(664
|
)
|
|
(738
|
)
|
|||
Cash acquired in acquisition, net of cash paid
|
195
|
|
|
(19
|
)
|
|
—
|
|
|||
Other
|
(145
|
)
|
|
(148
|
)
|
|
(243
|
)
|
|||
Net cash provided by (used in) investing activities
|
14,339
|
|
|
(4,024
|
)
|
|
(8,658
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net proceeds from issuance of debt
|
—
|
|
|
4,476
|
|
|
7,318
|
|
|||
Repayment of debt
|
(1,121
|
)
|
|
(4,405
|
)
|
|
(3,725
|
)
|
|||
Repurchases of common stock
|
(17,794
|
)
|
|
(3,160
|
)
|
|
(2,965
|
)
|
|||
Dividends paid
|
(3,507
|
)
|
|
(3,365
|
)
|
|
(2,998
|
)
|
|||
Withholding taxes arising from shares withheld for share-based payments
|
(126
|
)
|
|
(191
|
)
|
|
(260
|
)
|
|||
Other
|
58
|
|
|
51
|
|
|
31
|
|
|||
Net cash used in financing activities
|
(22,490
|
)
|
|
(6,594
|
)
|
|
(2,599
|
)
|
|||
Increase (decrease) in cash and cash equivalents
|
3,145
|
|
|
559
|
|
|
(903
|
)
|
|||
Cash and cash equivalents at beginning of year
|
3,800
|
|
|
3,241
|
|
|
4,144
|
|
|||
Cash and cash equivalents at end of year
|
$
|
6,945
|
|
|
$
|
3,800
|
|
|
$
|
3,241
|
|
|
|
Amounts
|
||
Total cash paid to Kirin
|
|
$
|
780
|
|
Fair value of contingent consideration obligation
|
|
45
|
|
|
Loss on settlement of preexisting relationship
|
|
(168
|
)
|
|
Total consideration transferred to acquire K-A
|
|
657
|
|
|
|
|
|
||
Fair value of Amgen’s investment in K-A
|
|
825
|
|
|
Total acquisition date fair value
|
|
$
|
1,482
|
|
|
|
Year ended December 31, 2018
|
||||||||||
|
|
US
|
|
ROW
|
|
Total
|
||||||
Enbrel
®
(etanercept)
|
|
$
|
4,807
|
|
|
$
|
207
|
|
|
$
|
5,014
|
|
Neulasta
®
(pegfilgrastim)
|
|
3,866
|
|
|
609
|
|
|
4,475
|
|
|||
Prolia
®
(denosumab)
|
|
1,500
|
|
|
791
|
|
|
2,291
|
|
|||
Aranesp
®
(darbepoetin alfa)
|
|
942
|
|
|
935
|
|
|
1,877
|
|
|||
XGEVA
®
(denosumab)
|
|
1,338
|
|
|
448
|
|
|
1,786
|
|
|||
Sensipar
®
/ Mimpara
®
(cinacalcet)
|
|
1,436
|
|
|
338
|
|
|
1,774
|
|
|||
EPOGEN
®
(epoetin alfa)
|
|
1,010
|
|
|
—
|
|
|
1,010
|
|
|||
Other products
|
|
2,530
|
|
|
1,776
|
|
|
4,306
|
|
|||
Total product sales
(1)
|
|
17,429
|
|
|
5,104
|
|
|
22,533
|
|
|||
Other revenues
|
|
929
|
|
|
285
|
|
|
1,214
|
|
|||
Total revenues
(2)
|
|
$
|
18,358
|
|
|
$
|
5,389
|
|
|
$
|
23,747
|
|
|
|
Year ended December 31, 2017
|
||||||||||
|
|
US
|
|
ROW
|
|
Total
|
||||||
ENBREL
|
|
$
|
5,206
|
|
|
$
|
227
|
|
|
$
|
5,433
|
|
Neulasta
®
|
|
3,931
|
|
|
603
|
|
|
4,534
|
|
|||
Aranesp
®
|
|
1,114
|
|
|
939
|
|
|
2,053
|
|
|||
Prolia
®
|
|
1,272
|
|
|
696
|
|
|
1,968
|
|
|||
Sensipar
®
/ Mimpara
®
|
|
1,374
|
|
|
344
|
|
|
1,718
|
|
|||
XGEVA
®
|
|
1,157
|
|
|
418
|
|
|
1,575
|
|
|||
EPOGEN
®
|
|
1,096
|
|
|
—
|
|
|
1,096
|
|
|||
Other products
|
|
1,981
|
|
|
1,437
|
|
|
3,418
|
|
|||
Total product sales
(1)
|
|
17,131
|
|
|
4,664
|
|
|
21,795
|
|
|||
Other revenues
|
|
898
|
|
|
156
|
|
|
1,054
|
|
|||
Total revenues
(2)
|
|
$
|
18,029
|
|
|
$
|
4,820
|
|
|
$
|
22,849
|
|
|
|
Year ended December 31, 2016
|
||||||||||
|
|
US
|
|
ROW
|
|
Total
|
||||||
ENBREL
|
|
$
|
5,719
|
|
|
$
|
246
|
|
|
$
|
5,965
|
|
Neulasta
®
|
|
3,925
|
|
|
723
|
|
|
4,648
|
|
|||
Aranesp
®
|
|
1,082
|
|
|
1,011
|
|
|
2,093
|
|
|||
Prolia
®
|
|
1,049
|
|
|
586
|
|
|
1,635
|
|
|||
Sensipar
®
/ Mimpara
®
|
|
1,240
|
|
|
342
|
|
|
1,582
|
|
|||
XGEVA
®
|
|
1,115
|
|
|
414
|
|
|
1,529
|
|
|||
EPOGEN
®
|
|
1,282
|
|
|
—
|
|
|
1,282
|
|
|||
Other products
|
|
1,913
|
|
|
1,245
|
|
|
3,158
|
|
|||
Total product sales
(1)
|
|
17,325
|
|
|
4,567
|
|
|
21,892
|
|
|||
Other revenues
|
|
1,001
|
|
|
98
|
|
|
1,099
|
|
|||
Total revenues
(2)
|
|
$
|
18,326
|
|
|
$
|
4,665
|
|
|
$
|
22,991
|
|
(1)
|
Hedging gains and losses, which are included in product sales, were not material for the years ended
December 31, 2018
and
2017
. For the year ended December 31,
2016
, hedging gains were
$308 million
.
|
(2)
|
Prior-period amounts are not adjusted under the modified-retrospective method of adoption of the new revenue recognition accounting standard.
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
RSUs
|
$
|
165
|
|
|
$
|
174
|
|
|
$
|
177
|
|
Performance units
|
117
|
|
|
133
|
|
|
123
|
|
|||
Stock options
|
29
|
|
|
22
|
|
|
11
|
|
|||
Total stock-based compensation expense, pretax
|
311
|
|
|
329
|
|
|
311
|
|
|||
Tax benefit from stock-based compensation expense
|
(67
|
)
|
|
(118
|
)
|
|
(112
|
)
|
|||
Total stock-based compensation expense, net of tax
|
$
|
244
|
|
|
$
|
211
|
|
|
$
|
199
|
|
|
Year ended December 31, 2018
|
|||||
|
Units
(in millions)
|
|
Weighted-average
grant date
fair value
|
|||
Balance nonvested at December 31, 2017
|
3.4
|
|
|
$
|
155.11
|
|
Granted
|
1.2
|
|
|
$
|
179.18
|
|
Vested
|
(1.2
|
)
|
|
$
|
142.82
|
|
Forfeited
|
(0.3
|
)
|
|
$
|
163.36
|
|
Balance nonvested at December 31, 2018
|
3.1
|
|
|
$
|
168.11
|
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Closing price of our common stock on grant date
|
$
|
177.46
|
|
|
$
|
162.60
|
|
|
$
|
156.35
|
|
Expected volatility (average of implied and historical volatility)
|
24.6
|
%
|
|
22.7
|
%
|
|
24.3
|
%
|
|||
Expected life (in years)
|
5.8
|
|
|
5.8
|
|
|
5.8
|
|
|||
Risk-free interest rate
|
2.8
|
%
|
|
2.1
|
%
|
|
1.5
|
%
|
|||
Expected dividend yield
|
2.9
|
%
|
|
2.8
|
%
|
|
2.6
|
%
|
|||
Fair value of stock options granted
|
$
|
34.60
|
|
|
$
|
27.54
|
|
|
$
|
27.55
|
|
|
Year ended December 31, 2018
|
|||||||||||
|
Options
(in millions)
|
|
Weighted-
average
exercise price
|
|
Weighted-
average
remaining
contractual
life (in years)
|
|
Aggregate
intrinsic
value
(in millions)
|
|||||
Balance unexercised at December 31, 2017
|
4.0
|
|
|
$
|
127.08
|
|
|
|
|
|
||
Granted
|
1.2
|
|
|
$
|
177.46
|
|
|
|
|
|
||
Exercised
|
(0.5
|
)
|
|
$
|
76.68
|
|
|
|
|
|
||
Expired/forfeited
|
(0.3
|
)
|
|
$
|
163.79
|
|
|
|
|
|
||
Balance unexercised at December 31, 2018
|
4.4
|
|
|
$
|
143.57
|
|
|
7.0
|
|
$
|
225
|
|
Vested or expected to vest at December 31, 2018
|
4.2
|
|
|
$
|
142.09
|
|
|
6.9
|
|
$
|
220
|
|
Exercisable at December 31, 2018
|
1.2
|
|
|
$
|
84.01
|
|
|
3.3
|
|
$
|
135
|
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Closing price of our common stock on grant date
|
$
|
177.93
|
|
|
$
|
162.60
|
|
|
$
|
156.35
|
|
Volatility
|
23.8
|
%
|
|
25.9
|
%
|
|
25.8
|
%
|
|||
Risk-free interest rate
|
2.6
|
%
|
|
1.4
|
%
|
|
0.9
|
%
|
|||
Fair value of units granted
|
$
|
189.21
|
|
|
$
|
178.87
|
|
|
$
|
170.56
|
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Domestic
|
$
|
4,856
|
|
|
$
|
4,436
|
|
|
$
|
4,478
|
|
Foreign
|
4,689
|
|
|
5,161
|
|
|
4,685
|
|
|||
Total income before income taxes
|
$
|
9,545
|
|
|
$
|
9,597
|
|
|
$
|
9,163
|
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Current provision:
|
|
|
|
|
|
||||||
Federal
|
$
|
1,270
|
|
|
$
|
8,615
|
|
|
$
|
984
|
|
State
|
17
|
|
|
5
|
|
|
65
|
|
|||
Foreign
|
227
|
|
|
275
|
|
|
176
|
|
|||
Total current provision
|
1,514
|
|
|
8,895
|
|
|
1,225
|
|
|||
Deferred (benefit) provision:
|
|
|
|
|
|
||||||
Federal
|
(317
|
)
|
|
(1,120
|
)
|
|
372
|
|
|||
State
|
(7
|
)
|
|
—
|
|
|
(69
|
)
|
|||
Foreign
|
(39
|
)
|
|
(157
|
)
|
|
(87
|
)
|
|||
Total deferred (benefit) provision
|
(363
|
)
|
|
(1,277
|
)
|
|
216
|
|
|||
Total provision for income taxes
|
$
|
1,151
|
|
|
$
|
7,618
|
|
|
$
|
1,441
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Deferred income tax assets:
|
|
|
|
||||
NOL and credit carryforwards
|
$
|
810
|
|
|
$
|
812
|
|
Accrued expenses
|
428
|
|
|
362
|
|
||
Expenses capitalized for tax
|
185
|
|
|
155
|
|
||
Stock-based compensation
|
95
|
|
|
99
|
|
||
Other
|
174
|
|
|
154
|
|
||
Total deferred income tax assets
|
1,692
|
|
|
1,582
|
|
||
Valuation allowance
|
(509
|
)
|
|
(497
|
)
|
||
Net deferred income tax assets
|
1,183
|
|
|
1,085
|
|
||
|
|
|
|
||||
Deferred income tax liabilities:
|
|
|
|
||||
Acquired intangible assets
|
(1,509
|
)
|
|
(1,748
|
)
|
||
Debt
|
(184
|
)
|
|
(184
|
)
|
||
Other
|
(267
|
)
|
|
(240
|
)
|
||
Total deferred income tax liabilities
|
(1,960
|
)
|
|
(2,172
|
)
|
||
Total deferred income taxes, net
|
$
|
(777
|
)
|
|
$
|
(1,087
|
)
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance
|
$
|
2,953
|
|
|
$
|
2,543
|
|
|
$
|
2,114
|
|
Additions based on tax positions related to the current year
|
173
|
|
|
447
|
|
|
425
|
|
|||
Additions based on tax positions related to prior years
|
13
|
|
|
1
|
|
|
18
|
|
|||
Reductions for tax positions of prior years
|
(17
|
)
|
|
(5
|
)
|
|
(7
|
)
|
|||
Reductions for expiration of statute of limitations
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
Settlements
|
(61
|
)
|
|
(28
|
)
|
|
(7
|
)
|
|||
Ending balance
|
$
|
3,061
|
|
|
$
|
2,953
|
|
|
$
|
2,543
|
|
|
Years ended December 31,
|
|||||||
|
2018
|
|
2017
|
|
2016
|
|||
Federal statutory tax rate
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
2017 Tax Act, net repatriation tax
|
—
|
%
|
|
70.7
|
%
|
|
—
|
%
|
Foreign earnings
|
(4.3
|
)%
|
|
(15.8
|
)%
|
|
(15.5
|
)%
|
2017 Tax Act, net deferred tax remeasurement
|
—
|
%
|
|
(6.9
|
)%
|
|
—
|
%
|
Credits, Puerto Rico Excise Tax
|
(2.5
|
)%
|
|
(2.2
|
)%
|
|
(2.3
|
)%
|
2017 Tax Act, net impact on intercompany sales
|
(1.8
|
)%
|
|
—
|
%
|
|
—
|
%
|
Interest on uncertain tax positions
|
1.2
|
%
|
|
0.6
|
%
|
|
0.5
|
%
|
Credits, primarily federal R&D
|
(0.8
|
)%
|
|
(0.6
|
)%
|
|
(0.7
|
)%
|
Share-based payments
|
(0.2
|
)%
|
|
(0.7
|
)%
|
|
(1.3
|
)%
|
Other, net
|
(0.5
|
)%
|
|
(0.7
|
)%
|
|
—
|
%
|
Effective tax rate
|
12.1
|
%
|
|
79.4
|
%
|
|
15.7
|
%
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Income (Numerator):
|
|
|
|
|
|
||||||
Net income for basic and diluted EPS
|
$
|
8,394
|
|
|
$
|
1,979
|
|
|
$
|
7,722
|
|
|
|
|
|
|
|
||||||
Shares (Denominator):
|
|
|
|
|
|
||||||
Weighted-average shares for basic EPS
|
661
|
|
|
731
|
|
|
748
|
|
|||
Effect of dilutive securities
|
4
|
|
|
4
|
|
|
6
|
|
|||
Weighted-average shares for diluted EPS
|
665
|
|
|
735
|
|
|
754
|
|
|||
|
|
|
|
|
|
||||||
Basic EPS
|
$
|
12.70
|
|
|
$
|
2.71
|
|
|
$
|
10.32
|
|
Diluted EPS
|
$
|
12.62
|
|
|
$
|
2.69
|
|
|
$
|
10.24
|
|
Types of securities as of December 31, 2018
|
|
Amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Fair
values
|
||||||||
U.S. Treasury notes
|
|
$
|
2,710
|
|
|
$
|
—
|
|
|
$
|
(47
|
)
|
|
$
|
2,663
|
|
U.S. Treasury bills
|
|
8,191
|
|
|
—
|
|
|
—
|
|
|
8,191
|
|
||||
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
112
|
|
|
—
|
|
|
(2
|
)
|
|
110
|
|
||||
Foreign and other
|
|
972
|
|
|
1
|
|
|
(41
|
)
|
|
932
|
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
2,778
|
|
|
—
|
|
|
(81
|
)
|
|
2,697
|
|
||||
Industrial
|
|
2,603
|
|
|
—
|
|
|
(99
|
)
|
|
2,504
|
|
||||
Other
|
|
583
|
|
|
—
|
|
|
(21
|
)
|
|
562
|
|
||||
Residential-mortgage-backed securities
|
|
1,458
|
|
|
—
|
|
|
(36
|
)
|
|
1,422
|
|
||||
Other mortgage- and asset-backed securities
|
|
483
|
|
|
—
|
|
|
(14
|
)
|
|
469
|
|
||||
Money market mutual funds
|
|
5,659
|
|
|
—
|
|
|
—
|
|
|
5,659
|
|
||||
Other short-term interest-bearing securities
|
|
3,515
|
|
|
—
|
|
|
—
|
|
|
3,515
|
|
||||
Total available-for-sale investments
|
|
$
|
29,064
|
|
|
$
|
1
|
|
|
$
|
(341
|
)
|
|
$
|
28,724
|
|
Types of securities as of December 31, 2017
|
|
Amortized
cost
|
|
Gross
unrealized
gains
|
|
Gross
unrealized
losses
|
|
Fair
values
|
||||||||
U.S. Treasury notes
|
|
$
|
8,313
|
|
|
$
|
1
|
|
|
$
|
(72
|
)
|
|
$
|
8,242
|
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
225
|
|
|
—
|
|
|
(2
|
)
|
|
223
|
|
||||
Foreign and other
|
|
2,415
|
|
|
18
|
|
|
(11
|
)
|
|
2,422
|
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
10,089
|
|
|
17
|
|
|
(34
|
)
|
|
10,072
|
|
||||
Industrial
|
|
9,688
|
|
|
34
|
|
|
(52
|
)
|
|
9,670
|
|
||||
Other
|
|
1,393
|
|
|
3
|
|
|
(6
|
)
|
|
1,390
|
|
||||
Residential-mortgage-backed securities
|
|
2,198
|
|
|
—
|
|
|
(30
|
)
|
|
2,168
|
|
||||
Other mortgage- and asset-backed securities
|
|
2,312
|
|
|
—
|
|
|
(15
|
)
|
|
2,297
|
|
||||
Money market mutual funds
|
|
3,245
|
|
|
—
|
|
|
—
|
|
|
3,245
|
|
||||
Other short-term interest-bearing securities
|
|
1,440
|
|
|
—
|
|
|
—
|
|
|
1,440
|
|
||||
Total interest-bearing securities
|
|
41,318
|
|
|
73
|
|
|
(222
|
)
|
|
41,169
|
|
||||
Equity securities
|
|
135
|
|
|
14
|
|
|
—
|
|
|
149
|
|
||||
Total available-for-sale investments
|
|
$
|
41,453
|
|
|
$
|
87
|
|
|
$
|
(222
|
)
|
|
$
|
41,318
|
|
|
|
December 31,
|
||||||
Consolidated Balance Sheets locations
|
|
2018
|
|
2017
|
||||
Cash and cash equivalents
|
|
$
|
6,365
|
|
|
$
|
3,291
|
|
Marketable securities
|
|
22,359
|
|
|
37,878
|
|
||
Other assets
|
|
—
|
|
|
149
|
|
||
Total available-for-sale investments
|
|
$
|
28,724
|
|
|
$
|
41,318
|
|
|
|
December 31,
|
||||||
Contractual maturities
|
|
2018
|
|
2017
|
||||
Maturing in one year or less
|
|
$
|
17,424
|
|
|
$
|
6,733
|
|
Maturing after one year through three years
|
|
3,356
|
|
|
12,820
|
|
||
Maturing after three years through five years
|
|
5,168
|
|
|
13,836
|
|
||
Maturing after five years through ten years
|
|
885
|
|
|
3,263
|
|
||
Maturing after ten years
|
|
—
|
|
|
52
|
|
||
Mortgage- and asset-backed securities
|
|
1,891
|
|
|
4,465
|
|
||
Total interest-bearing securities
|
|
$
|
28,724
|
|
|
$
|
41,169
|
|
|
|
Less than 12 months
|
|
12 months or more
|
||||||||||||
Types of securities as of December 31, 2018
|
|
Fair values
|
|
Unrealized losses
|
|
Fair values
|
|
Unrealized losses
|
||||||||
U.S. Treasury notes
|
|
$
|
1,219
|
|
|
$
|
(21
|
)
|
|
$
|
1,444
|
|
|
$
|
(26
|
)
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
—
|
|
|
—
|
|
|
110
|
|
|
(2
|
)
|
||||
Foreign and other
|
|
631
|
|
|
(31
|
)
|
|
240
|
|
|
(10
|
)
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
1,968
|
|
|
(59
|
)
|
|
718
|
|
|
(22
|
)
|
||||
Industrial
|
|
1,898
|
|
|
(81
|
)
|
|
529
|
|
|
(18
|
)
|
||||
Other
|
|
529
|
|
|
(20
|
)
|
|
28
|
|
|
(1
|
)
|
||||
Residential-mortgage-backed securities
|
|
576
|
|
|
(14
|
)
|
|
840
|
|
|
(22
|
)
|
||||
Other mortgage- and asset-backed securities
|
|
17
|
|
|
—
|
|
|
451
|
|
|
(14
|
)
|
||||
Total
|
|
$
|
6,838
|
|
|
$
|
(226
|
)
|
|
$
|
4,360
|
|
|
$
|
(115
|
)
|
|
|
Less than 12 months
|
|
12 months or more
|
||||||||||||
Types of securities as of December 31, 2017
|
|
Fair values
|
|
Unrealized losses
|
|
Fair values
|
|
Unrealized losses
|
||||||||
U.S. Treasury notes
|
|
$
|
7,728
|
|
|
$
|
(70
|
)
|
|
$
|
195
|
|
|
$
|
(2
|
)
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
188
|
|
|
(1
|
)
|
|
34
|
|
|
(1
|
)
|
||||
Foreign and other
|
|
1,163
|
|
|
(9
|
)
|
|
115
|
|
|
(2
|
)
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
5,928
|
|
|
(28
|
)
|
|
462
|
|
|
(6
|
)
|
||||
Industrial
|
|
5,760
|
|
|
(43
|
)
|
|
612
|
|
|
(9
|
)
|
||||
Other
|
|
868
|
|
|
(4
|
)
|
|
117
|
|
|
(2
|
)
|
||||
Residential-mortgage-backed securities
|
|
1,838
|
|
|
(24
|
)
|
|
276
|
|
|
(6
|
)
|
||||
Other mortgage- and asset-backed securities
|
|
1,777
|
|
|
(12
|
)
|
|
250
|
|
|
(3
|
)
|
||||
Total
|
|
$
|
25,250
|
|
|
$
|
(191
|
)
|
|
$
|
2,061
|
|
|
$
|
(31
|
)
|
|
|
|
December 31,
|
||||||
|
Useful life (in years)
|
|
2018
|
|
2017
|
||||
Land
|
—
|
|
$
|
265
|
|
|
$
|
283
|
|
Buildings and improvements
|
10-40
|
|
3,616
|
|
|
3,507
|
|
||
Manufacturing equipment
|
8-12
|
|
2,418
|
|
|
2,372
|
|
||
Laboratory equipment
|
8-12
|
|
1,174
|
|
|
1,179
|
|
||
Capitalized software
|
3-5
|
|
1,124
|
|
|
1,150
|
|
||
Other
|
3-15
|
|
3,204
|
|
|
3,254
|
|
||
Construction in progress
|
—
|
|
953
|
|
|
834
|
|
||
Property, plant and equipment, gross
|
|
|
12,754
|
|
|
12,579
|
|
||
Less accumulated depreciation and amortization
|
|
|
(7,796
|
)
|
|
(7,590
|
)
|
||
Property, plant and equipment, net
|
|
|
$
|
4,958
|
|
|
$
|
4,989
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
United States
|
$
|
2,373
|
|
|
$
|
2,349
|
|
Puerto Rico
|
1,476
|
|
|
1,527
|
|
||
ROW
|
1,109
|
|
|
1,113
|
|
||
Total property, plant and equipment, net
|
$
|
4,958
|
|
|
$
|
4,989
|
|
|
Years ended December 31,
|
||||||
|
2018
|
|
2017
|
||||
Beginning balance
|
$
|
14,761
|
|
|
$
|
14,751
|
|
Addition from K-A acquisition
|
6
|
|
|
—
|
|
||
Currency translation adjustments
|
(68
|
)
|
|
10
|
|
||
Ending balance
|
$
|
14,699
|
|
|
$
|
14,761
|
|
|
December 31,
|
||||||||||||||||||||||
|
2018
|
|
2017
|
||||||||||||||||||||
|
Gross
carrying
amounts
|
|
Accumulated
amortization
|
|
Other intangible
assets, net
|
|
Gross
carrying
amounts
|
|
Accumulated
amortization
|
|
Other intangible
assets, net
|
||||||||||||
Finite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Developed-product-technology rights
|
$
|
12,573
|
|
|
$
|
(7,479
|
)
|
|
$
|
5,094
|
|
|
$
|
12,589
|
|
|
$
|
(6,796
|
)
|
|
$
|
5,793
|
|
Licensing rights
|
3,772
|
|
|
(2,032
|
)
|
|
1,740
|
|
|
3,275
|
|
|
(1,601
|
)
|
|
1,674
|
|
||||||
Marketing-related rights
|
1,297
|
|
|
(1,019
|
)
|
|
278
|
|
|
1,319
|
|
|
(920
|
)
|
|
399
|
|
||||||
R&D technology rights
|
1,148
|
|
|
(872
|
)
|
|
276
|
|
|
1,161
|
|
|
(804
|
)
|
|
357
|
|
||||||
Total finite-lived intangible assets
|
18,790
|
|
|
(11,402
|
)
|
|
7,388
|
|
|
18,344
|
|
|
(10,121
|
)
|
|
8,223
|
|
||||||
Indefinite-lived intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
IPR&D
|
55
|
|
|
—
|
|
|
55
|
|
|
386
|
|
|
—
|
|
|
386
|
|
||||||
Total other intangible assets
|
$
|
18,845
|
|
|
$
|
(11,402
|
)
|
|
$
|
7,443
|
|
|
$
|
18,730
|
|
|
$
|
(10,121
|
)
|
|
$
|
8,609
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Sales deductions
|
$
|
3,170
|
|
|
$
|
2,247
|
|
Employee compensation and benefits
|
1,001
|
|
|
816
|
|
||
Dividends payable
|
914
|
|
|
953
|
|
||
Sales returns reserve
|
535
|
|
|
455
|
|
||
Other
|
2,242
|
|
|
2,045
|
|
||
Total accrued liabilities
|
$
|
7,862
|
|
|
$
|
6,516
|
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
6.15% notes due 2018 (6.15% 2018 Notes)
|
$
|
—
|
|
|
$
|
500
|
|
4.375% €550 million notes due 2018 (4.375% 2018 euro Notes)
|
—
|
|
|
653
|
|
||
5.70% notes due 2019 (5.70% 2019 Notes)
|
1,000
|
|
|
1,000
|
|
||
1.90% notes due 2019 (1.90% 2019 Notes)
|
700
|
|
|
700
|
|
||
Floating Rate Notes due 2019
|
550
|
|
|
550
|
|
||
2.20% notes due 2019 (2.20% 2019 Notes)
|
1,400
|
|
|
1,400
|
|
||
2.125% €675 million notes due 2019 (2.125% 2019 euro Notes)
|
774
|
|
|
810
|
|
||
4.50% notes due 2020 (4.50% 2020 Notes)
|
300
|
|
|
300
|
|
||
2.125% notes due 2020 (2.125% 2020 Notes)
|
750
|
|
|
750
|
|
||
Floating Rate Notes due 2020
|
300
|
|
|
300
|
|
||
2.20% notes due 2020 (2.20% 2020 Notes)
|
700
|
|
|
700
|
|
||
3.45% notes due 2020 (3.45% 2020 Notes)
|
900
|
|
|
900
|
|
||
4.10% notes due 2021 (4.10% 2021 Notes)
|
1,000
|
|
|
1,000
|
|
||
1.85% notes due 2021 (1.85% 2021 Notes)
|
750
|
|
|
750
|
|
||
3.875% notes due 2021 (3.875% 2021 Notes)
|
1,750
|
|
|
1,750
|
|
||
1.25% €1,250 million notes due 2022 (1.25% 2022 euro Notes)
|
1,433
|
|
|
1,501
|
|
||
2.70% notes due 2022 (2.70% 2022 Notes)
|
500
|
|
|
500
|
|
||
2.65% notes due 2022 (2.65% 2022 Notes)
|
1,500
|
|
|
1,500
|
|
||
3.625% notes due 2022 (3.625% 2022 Notes)
|
750
|
|
|
750
|
|
||
0.41% CHF700 million bonds due 2023 (0.41% 2023 Swiss franc Bonds)
|
713
|
|
|
719
|
|
||
2.25% notes due 2023 (2.25% 2023 Notes)
|
750
|
|
|
750
|
|
||
3.625% notes due 2024 (3.625% 2024 Notes)
|
1,400
|
|
|
1,400
|
|
||
3.125% notes due 2025 (3.125% 2025 Notes)
|
1,000
|
|
|
1,000
|
|
||
2.00% €750 million notes due 2026 (2.00% 2026 euro Notes)
|
860
|
|
|
901
|
|
||
2.60% notes due 2026 (2.60% 2026 Notes)
|
1,250
|
|
|
1,250
|
|
||
5.50% £475 million notes due 2026 (5.50% 2026 pound sterling Notes)
|
606
|
|
|
642
|
|
||
3.20% notes due 2027 (3.20% 2027 Notes)
|
1,000
|
|
|
1,000
|
|
||
4.00% £700 million notes due 2029 (4.00% 2029 pound sterling Notes)
|
893
|
|
|
946
|
|
||
6.375% notes due 2037 (6.375% 2037 Notes)
|
552
|
|
|
552
|
|
||
6.90% notes due 2038 (6.90% 2038 Notes)
|
291
|
|
|
291
|
|
||
6.40% notes due 2039 (6.40% 2039 Notes)
|
466
|
|
|
466
|
|
||
5.75% notes due 2040 (5.75% 2040 Notes)
|
412
|
|
|
412
|
|
||
4.95% notes due 2041 (4.95% 2041 Notes)
|
600
|
|
|
600
|
|
||
5.15% notes due 2041 (5.15% 2041 Notes)
|
974
|
|
|
974
|
|
||
5.65% notes due 2042 (5.65% 2042 Notes)
|
487
|
|
|
487
|
|
||
5.375% notes due 2043 (5.375% 2043 Notes)
|
261
|
|
|
261
|
|
||
4.40% notes due 2045 (4.40% 2045 Notes)
|
2,250
|
|
|
2,250
|
|
||
4.563% notes due 2048 (4.563% 2048 Notes)
|
1,415
|
|
|
1,415
|
|
||
4.663% notes due 2051 (4.663% 2051 Notes)
|
3,541
|
|
|
3,541
|
|
||
Other notes due 2097
|
100
|
|
|
100
|
|
||
Unamortized discounts, premiums, issuance costs and fair value adjustments, net
|
(949
|
)
|
|
(929
|
)
|
||
Total carrying value of debt
|
33,929
|
|
|
35,342
|
|
||
Less current portion
|
(4,419
|
)
|
|
(1,152
|
)
|
||
Total long-term debt
|
$
|
29,510
|
|
|
$
|
34,190
|
|
•
|
In 2017, we issued
$4.5 billion
principal amount of notes, consisting of the Floating Rate Notes due 2019, the
1.90%
2019 Notes, the Floating Rate Notes due 2020, the
2.20%
2020 Notes, the
2.65%
2022 Notes and the
3.20%
2027 Notes.
|
•
|
In 2016, we issued
$6.7 billion
principal amount of notes, consisting of the
1.85%
2021 Notes, the
1.25%
2022 euro Notes, the
0.41%
2023 Swiss franc Bonds, the
2.25%
2023 Notes, the
2.00%
2026 euro Notes and the
2.60%
2026 Notes and
$1.0 billion
of the
4.40%
2045 Notes. We received a
$79 million
premium on the
4.40%
2045 Notes. In addition, we borrowed
$605 million
under a short-term floating-rate loan.
|
|
|
|
|
December 31,
|
||||||
|
|
|
|
2018
|
|
2017
|
||||
Notes
|
|
Effective interest rates
|
|
Notional amounts
|
||||||
2.20% 2019 Notes
|
|
LIBOR + 0.6%
|
|
$
|
1,400
|
|
|
$
|
1,400
|
|
3.45% 2020 Notes
|
|
LIBOR + 1.1%
|
|
900
|
|
|
900
|
|
||
4.10% 2021 Notes
|
|
LIBOR + 1.7%
|
|
1,000
|
|
|
1,000
|
|
||
3.875% 2021 Notes
|
|
LIBOR + 2.0%
|
|
1,750
|
|
|
1,750
|
|
||
3.625% 2022 Notes
|
|
LIBOR + 1.6%
|
|
750
|
|
|
750
|
|
||
3.625% 2024 Notes
|
|
LIBOR + 1.4%
|
|
1,400
|
|
|
1,400
|
|
||
3.125% 2025 Notes
|
|
LIBOR + 0.9%
|
|
1,000
|
|
|
1,000
|
|
||
2.600% 2026 Notes
|
|
LIBOR + 0.3%
|
|
1,250
|
|
|
1,250
|
|
||
4.663% 2051 Notes
|
|
LIBOR + 0.0%
|
|
1,500
|
|
|
—
|
|
||
Total notional amounts
|
|
|
|
$
|
10,950
|
|
|
$
|
9,450
|
|
Maturity dates
|
|
Amounts
|
||
2019
|
|
$
|
4,424
|
|
2020
|
|
2,950
|
|
|
2021
|
|
3,500
|
|
|
2022
|
|
4,183
|
|
|
2023
|
|
1,463
|
|
|
Thereafter
|
|
18,358
|
|
|
Total
|
|
$
|
34,878
|
|
|
Years ended December 31,
|
|||||||||||||||||||
|
2018
|
|
2017
|
|
2016
|
|||||||||||||||
|
Shares *
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|
Shares
|
|
Dollars
|
|||||||||
First quarter
|
56.4
|
|
|
$
|
10,787
|
|
|
3.4
|
|
|
$
|
555
|
|
|
4.7
|
|
|
$
|
690
|
|
Second quarter
|
18.2
|
|
|
3,190
|
|
|
6.2
|
|
|
1,006
|
|
|
3.9
|
|
|
591
|
|
|||
Third quarter
|
8.7
|
|
|
1,713
|
|
|
4.4
|
|
|
769
|
|
|
4.4
|
|
|
747
|
|
|||
Fourth quarter
|
11.1
|
|
|
2,165
|
|
|
4.5
|
|
|
796
|
|
|
6.7
|
|
|
999
|
|
|||
Total stock repurchases
|
94.5
|
|
|
$
|
17,855
|
|
|
18.5
|
|
|
$
|
3,126
|
|
|
19.7
|
|
|
$
|
3,027
|
|
|
Foreign
currency
translation
|
|
Cash flow
hedges
|
|
Available-for-sale
securities
|
|
Other
|
|
AOCI
|
||||||||||
Balance as of December 31, 2015
|
$
|
(511
|
)
|
|
$
|
297
|
|
|
$
|
(260
|
)
|
|
$
|
(6
|
)
|
|
$
|
(480
|
)
|
Foreign currency translation adjustments
|
(93
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(93
|
)
|
|||||
Unrealized (losses) gains
|
—
|
|
|
(176
|
)
|
|
63
|
|
|
—
|
|
|
(113
|
)
|
|||||
Reclassification adjustments to income
|
—
|
|
|
139
|
|
|
61
|
|
|
—
|
|
|
200
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Income taxes
|
(6
|
)
|
|
22
|
|
|
(2
|
)
|
|
—
|
|
|
14
|
|
|||||
Balance as of December 31, 2016
|
(610
|
)
|
|
282
|
|
|
(138
|
)
|
|
(5
|
)
|
|
(471
|
)
|
|||||
Foreign currency translation adjustments
|
77
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
77
|
|
|||||
Unrealized gains (losses)
|
—
|
|
|
192
|
|
|
(46
|
)
|
|
—
|
|
|
146
|
|
|||||
Reclassification adjustments to income
|
—
|
|
|
(638
|
)
|
|
41
|
|
|
—
|
|
|
(597
|
)
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
5
|
|
|||||
Income taxes
|
4
|
|
|
158
|
|
|
(1
|
)
|
|
—
|
|
|
161
|
|
|||||
Balance as of December 31, 2017
|
(529
|
)
|
|
(6
|
)
|
|
(144
|
)
|
|
—
|
|
|
(679
|
)
|
|||||
Cumulative effect of change in accounting principle, net of tax
(1)
|
—
|
|
|
—
|
|
|
(9
|
)
|
|
—
|
|
|
(9
|
)
|
|||||
Foreign currency translation adjustments
|
(141
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(141
|
)
|
|||||
Unrealized gains (losses)
|
—
|
|
|
61
|
|
|
(556
|
)
|
|
—
|
|
|
(495
|
)
|
|||||
Reclassification adjustments to income
|
—
|
|
|
262
|
|
|
365
|
|
|
—
|
|
|
627
|
|
|||||
Other
|
—
|
|
|
—
|
|
|
—
|
|
|
(2
|
)
|
|
(2
|
)
|
|||||
Income taxes
|
—
|
|
|
(76
|
)
|
|
6
|
|
|
—
|
|
|
(70
|
)
|
|||||
Balance as of December 31, 2018
|
$
|
(670
|
)
|
|
$
|
241
|
|
|
$
|
(338
|
)
|
|
$
|
(2
|
)
|
|
$
|
(769
|
)
|
(1)
|
See Note 1, Summary of significant accounting policies, for additional information regarding the adoption on January 1, 2018, of the new accounting standard related to the classification and measurement of financial instruments and the related cumulative effect from the change in accounting principle.
|
|
|
Years ended December 31,
|
|
|
||||||||||
Components of AOCI
|
|
2018
|
|
2017
|
|
2016
|
|
Consolidated Statements of Income locations
|
||||||
Cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||
Foreign currency contract (losses) gains
|
|
$
|
(21
|
)
|
|
$
|
65
|
|
|
$
|
308
|
|
|
Product sales
|
Cross-currency swap contract (losses) gains
|
|
(241
|
)
|
|
574
|
|
|
(446
|
)
|
|
Interest and other income, net
|
|||
Forward interest rate contract losses
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|
Interest expense, net
|
|||
|
|
(262
|
)
|
|
638
|
|
|
(139
|
)
|
|
Income before income taxes
|
|||
|
|
55
|
|
|
(226
|
)
|
|
46
|
|
|
Provision for income taxes
|
|||
|
|
$
|
(207
|
)
|
|
$
|
412
|
|
|
$
|
(93
|
)
|
|
Net income
|
Available-for-sale securities:
|
|
|
|
|
|
|
|
|
||||||
Net realized losses
|
|
$
|
(365
|
)
|
|
$
|
(41
|
)
|
|
$
|
(61
|
)
|
|
Interest and other income, net
|
|
|
3
|
|
|
(8
|
)
|
|
11
|
|
|
Provision for income taxes
|
|||
|
|
$
|
(362
|
)
|
|
$
|
(49
|
)
|
|
$
|
(50
|
)
|
|
Net income
|
Level 1
|
—
|
Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access
|
Level 2
|
—
|
Valuations for which all significant inputs are observable either directly or indirectly—other than Level 1 inputs
|
Level 3
|
—
|
Valuations based on inputs that are unobservable and significant to the overall fair value measurement
|
Fair value measurement as of December 31, 2018, using:
|
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest-bearing securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury notes
|
|
$
|
2,663
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,663
|
|
U.S. Treasury bills
|
|
8,191
|
|
|
—
|
|
|
—
|
|
|
8,191
|
|
||||
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
—
|
|
|
110
|
|
|
—
|
|
|
110
|
|
||||
Foreign and other
|
|
—
|
|
|
932
|
|
|
—
|
|
|
932
|
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
—
|
|
|
2,697
|
|
|
—
|
|
|
2,697
|
|
||||
Industrial
|
|
—
|
|
|
2,504
|
|
|
—
|
|
|
2,504
|
|
||||
Other
|
|
—
|
|
|
562
|
|
|
—
|
|
|
562
|
|
||||
Residential-mortgage-backed securities
|
|
—
|
|
|
1,422
|
|
|
—
|
|
|
1,422
|
|
||||
Other mortgage- and asset-backed securities
|
|
—
|
|
|
469
|
|
|
—
|
|
|
469
|
|
||||
Money market mutual funds
|
|
5,659
|
|
|
—
|
|
|
—
|
|
|
5,659
|
|
||||
Other short-term interest-bearing securities
|
|
—
|
|
|
3,515
|
|
|
—
|
|
|
3,515
|
|
||||
Equity securities
|
|
176
|
|
|
—
|
|
|
—
|
|
|
176
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
—
|
|
|
182
|
|
|
—
|
|
|
182
|
|
||||
Cross-currency swap contracts
|
|
—
|
|
|
170
|
|
|
—
|
|
|
170
|
|
||||
Interest rate swap contracts
|
|
—
|
|
|
56
|
|
|
—
|
|
|
56
|
|
||||
Total assets
|
|
$
|
16,689
|
|
|
$
|
12,619
|
|
|
$
|
—
|
|
|
$
|
29,308
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
$
|
—
|
|
|
$
|
26
|
|
|
$
|
—
|
|
|
$
|
26
|
|
Cross-currency swap contracts
|
|
—
|
|
|
401
|
|
|
—
|
|
|
401
|
|
||||
Interest rate swap contracts
|
|
—
|
|
|
149
|
|
|
—
|
|
|
149
|
|
||||
Contingent consideration obligations
|
|
—
|
|
|
—
|
|
|
72
|
|
|
72
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
576
|
|
|
$
|
72
|
|
|
$
|
648
|
|
Fair value measurement as of December 31, 2017, using:
|
|
Quoted prices in
active markets for
identical assets
(Level 1)
|
|
Significant other
observable
inputs
(Level 2)
|
|
Significant
unobservable
inputs
(Level 3)
|
|
Total
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Interest-bearing securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S. Treasury notes
|
|
$
|
8,242
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
8,242
|
|
Other government-related debt securities:
|
|
|
|
|
|
|
|
|
||||||||
U.S.
|
|
—
|
|
|
223
|
|
|
—
|
|
|
223
|
|
||||
Foreign and other
|
|
—
|
|
|
2,422
|
|
|
—
|
|
|
2,422
|
|
||||
Corporate debt securities:
|
|
|
|
|
|
|
|
|
||||||||
Financial
|
|
—
|
|
|
10,072
|
|
|
—
|
|
|
10,072
|
|
||||
Industrial
|
|
—
|
|
|
9,670
|
|
|
—
|
|
|
9,670
|
|
||||
Other
|
|
—
|
|
|
1,390
|
|
|
—
|
|
|
1,390
|
|
||||
Residential-mortgage-backed securities
|
|
—
|
|
|
2,168
|
|
|
—
|
|
|
2,168
|
|
||||
Other mortgage- and asset-backed securities
|
|
—
|
|
|
2,297
|
|
|
—
|
|
|
2,297
|
|
||||
Money market mutual funds
|
|
3,245
|
|
|
—
|
|
|
—
|
|
|
3,245
|
|
||||
Other short-term interest-bearing securities
|
|
—
|
|
|
1,440
|
|
|
—
|
|
|
1,440
|
|
||||
Equity securities
|
|
149
|
|
|
—
|
|
|
—
|
|
|
149
|
|
||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
—
|
|
|
6
|
|
|
—
|
|
|
6
|
|
||||
Cross-currency swap contracts
|
|
—
|
|
|
270
|
|
|
—
|
|
|
270
|
|
||||
Interest rate swap contracts
|
|
—
|
|
|
10
|
|
|
—
|
|
|
10
|
|
||||
Total assets
|
|
$
|
11,636
|
|
|
$
|
29,968
|
|
|
$
|
—
|
|
|
$
|
41,604
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Derivatives:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
|
$
|
—
|
|
|
$
|
204
|
|
|
$
|
—
|
|
|
$
|
204
|
|
Cross-currency swap contracts
|
|
—
|
|
|
220
|
|
|
—
|
|
|
220
|
|
||||
Interest rate swap contracts
|
|
—
|
|
|
61
|
|
|
—
|
|
|
61
|
|
||||
Contingent consideration obligations
|
|
—
|
|
|
—
|
|
|
69
|
|
|
69
|
|
||||
Total liabilities
|
|
$
|
—
|
|
|
$
|
485
|
|
|
$
|
69
|
|
|
$
|
554
|
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Beginning balance
|
$
|
69
|
|
|
$
|
179
|
|
|
$
|
188
|
|
Addition from K-A acquisition
|
45
|
|
|
—
|
|
|
—
|
|
|||
Net changes in valuations
|
(42
|
)
|
|
(110
|
)
|
|
(9
|
)
|
|||
Ending balance
|
$
|
72
|
|
|
$
|
69
|
|
|
$
|
179
|
|
|
|
Foreign currency
|
|
U.S. dollars
|
||||||||||
Hedged notes
|
|
Notional amounts
|
|
Interest rates
|
|
Notional amounts
|
|
Interest rates
|
||||||
2.125% 2019 euro Notes
|
|
€
|
675
|
|
|
2.1
|
%
|
|
$
|
864
|
|
|
2.6
|
%
|
1.25% 2022 euro Notes
|
|
€
|
1,250
|
|
|
1.3
|
%
|
|
$
|
1,388
|
|
|
3.2
|
%
|
0.41 % 2023 Swiss franc Bonds
|
|
CHF
|
700
|
|
|
0.4
|
%
|
|
$
|
704
|
|
|
3.4
|
%
|
2.00% 2026 euro Notes
|
|
€
|
750
|
|
|
2.0
|
%
|
|
$
|
833
|
|
|
3.9
|
%
|
5.50% 2026 pound sterling Notes
|
|
£
|
475
|
|
|
5.5
|
%
|
|
$
|
747
|
|
|
6.0
|
%
|
4.00% 2029 pound sterling Notes
|
|
£
|
700
|
|
|
4.0
|
%
|
|
$
|
1,111
|
|
|
4.5
|
%
|
|
|
|
|
Years ended December 31,
|
||||||||||
Derivatives in cash flow hedging relationships
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Foreign currency contracts
|
|
|
|
$
|
348
|
|
|
$
|
(402
|
)
|
|
$
|
115
|
|
Cross-currency swap contracts
|
|
|
|
(287
|
)
|
|
581
|
|
|
(281
|
)
|
|||
Forward interest rate contracts
|
|
|
|
—
|
|
|
13
|
|
|
(10
|
)
|
|||
Total unrealized gains (losses)
|
|
|
|
$
|
61
|
|
|
$
|
192
|
|
|
$
|
(176
|
)
|
|
|
|
|
Years ended December 31,
|
||||||||||
Derivatives in cash flow hedging relationships
|
|
Consolidated Statements of Income locations
|
|
2018
|
|
2017
|
|
2016
|
||||||
Foreign currency contracts
|
|
Product sales
|
|
$
|
(21
|
)
|
|
$
|
65
|
|
|
$
|
308
|
|
Cross-currency swap contracts
|
|
Interest and other income, net
|
|
(241
|
)
|
|
574
|
|
|
(446
|
)
|
|||
Forward interest rate contracts
|
|
Interest expense, net
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
|||
Total realized (losses) gains
|
|
|
|
$
|
(262
|
)
|
|
$
|
638
|
|
|
$
|
(139
|
)
|
|
|
Years ended December 31,
|
||||||||||
Derivatives in fair value hedging relationships
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net unrealized losses recognized on interest rate swap contracts
|
|
$
|
(42
|
)
|
|
$
|
(85
|
)
|
|
$
|
(34
|
)
|
Net unrealized gains recognized on related hedged debt
|
|
$
|
42
|
|
|
$
|
85
|
|
|
$
|
34
|
|
|
|
Carrying amounts of
hedged liabilities
(1)
|
|
Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities
(2)
|
||||||||||||
|
|
December 31,
|
|
December 31,
|
||||||||||||
Consolidated Balance Sheets locations
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
||||||||
Current portion of long-term debt
|
|
$
|
2,396
|
|
|
$
|
500
|
|
|
$
|
(3
|
)
|
|
$
|
23
|
|
Long-term debt
|
|
$
|
9,361
|
|
|
$
|
10,516
|
|
|
$
|
(50
|
)
|
|
$
|
(11
|
)
|
(1)
|
Current portion of long-term debt includes
$1.0 billion
and
$500 million
of carrying value with discontinued hedging relationships as of
December 31, 2018
and
2017
, respectively. Long-term debt includes
$137 million
and
$1.1 billion
of carrying value with discontinued hedging relationships as of
December 31, 2018
and
2017
, respectively.
|
(2)
|
Current portion of long-term debt includes
$3 million
and
$23 million
of hedging adjustments on discontinued hedging relationships as of
December 31, 2018
and
2017
, respectively. Long-term debt includes
$37 million
and
$40 million
of hedging adjustments on discontinued hedging relationships as of
December 31, 2018
and
2017
, respectively.
|
|
|
Year ended December 31, 2018
|
||||||||||
|
|
Product sales
|
|
Interest and other income, net
|
|
Interest (expense), net
|
||||||
Total amounts recorded in income and (expense) line items presented in the Consolidated Statements of Income
|
|
$
|
22,533
|
|
|
$
|
674
|
|
|
$
|
(1,392
|
)
|
The effects of cash flow and fair value hedging:
|
|
|
|
|
|
|
||||||
Losses on cash flow hedging relationships reclassified out of AOCI:
|
|
|
|
|
|
|
||||||
Foreign currency contracts
|
|
$
|
(21
|
)
|
|
|
|
|
||||
Cross-currency swap contracts
|
|
|
|
$
|
(241
|
)
|
|
|
||||
Gains (losses) on fair value hedging relationships—interest rate swap agreements:
|
|
|
|
|
|
|
||||||
Hedged items
(1)
|
|
|
|
|
|
$
|
65
|
|
||||
Derivatives designated as hedging instruments
|
|
|
|
|
|
$
|
(42
|
)
|
(1)
|
The amounts include benefits of
$23 million
related to the amortization of the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships for the year ended
December 31, 2018
.
|
|
|
|
|
Years ended December 31,
|
||||||||||
Derivatives not designated as hedging instruments
|
|
Consolidated Statements of Income location
|
|
2018
|
|
2017
|
|
2016
|
||||||
Foreign currency contracts
|
|
Interest and other income, net
|
|
$
|
34
|
|
|
$
|
24
|
|
|
$
|
(56
|
)
|
|
|
Derivative assets
|
|
Derivative liabilities
|
||||||||
December 31, 2018
|
|
Consolidated Balance Sheets locations
|
|
Fair values
|
|
Consolidated Balance Sheets locations
|
|
Fair values
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
Other current assets/ Other assets
|
|
$
|
181
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
$
|
26
|
|
Cross-currency swap contracts
|
|
Other current assets/ Other assets
|
|
170
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
401
|
|
||
Interest rate swap contracts
|
|
Other current assets/ Other assets
|
|
56
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
149
|
|
||
Total derivatives designated as hedging instruments
|
|
|
|
407
|
|
|
|
|
576
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
Other current assets
|
|
1
|
|
|
Accrued liabilities
|
|
—
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
|
1
|
|
|
|
|
—
|
|
||
Total derivatives
|
|
|
|
$
|
408
|
|
|
|
|
$
|
576
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Derivative assets
|
|
Derivative liabilities
|
||||||||
December 31, 2017
|
|
Consolidated Balance Sheets locations
|
|
Fair values
|
|
Consolidated Balance Sheets locations
|
|
Fair values
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
|
|
||||
Foreign currency contracts
|
|
Other current assets/ Other assets
|
|
$
|
6
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
$
|
204
|
|
Cross-currency swap contracts
|
|
Other current assets/ Other assets
|
|
270
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
220
|
|
||
Interest rate swap contracts
|
|
Other current assets/ Other assets
|
|
10
|
|
|
Accrued liabilities/ Other noncurrent liabilities
|
|
61
|
|
||
Total derivatives designated as hedging instruments
|
|
|
|
$
|
286
|
|
|
|
|
$
|
485
|
|
|
Amounts
|
||
2019
|
$
|
164
|
|
2020
|
126
|
|
|
2021
|
113
|
|
|
2022
|
64
|
|
|
2023
|
56
|
|
|
Thereafter
|
46
|
|
|
Total minimum operating lease commitments
|
$
|
569
|
|
|
Amounts
|
||
2019
|
$
|
586
|
|
2020
|
586
|
|
|
2021
|
586
|
|
|
2022
|
586
|
|
|
2023
|
1,099
|
|
|
Thereafter
|
3,296
|
|
|
Total remaining U.S. repatriation tax commitments
|
$
|
6,739
|
|
|
Years ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
AmerisourceBergen Corporation:
|
|
|
|
|
|
||||||
Gross product sales
|
$
|
12,091
|
|
|
$
|
10,742
|
|
|
$
|
10,100
|
|
% of total gross revenues
|
33
|
%
|
|
31
|
%
|
|
31
|
%
|
|||
% of U.S. gross product sales
|
39
|
%
|
|
37
|
%
|
|
38
|
%
|
|||
McKesson Corporation:
|
|
|
|
|
|
||||||
Gross product sales
|
$
|
11,434
|
|
|
$
|
10,625
|
|
|
$
|
9,710
|
|
% of total gross revenues
|
31
|
%
|
|
30
|
%
|
|
30
|
%
|
|||
% of U.S. gross product sales
|
35
|
%
|
|
35
|
%
|
|
34
|
%
|
|||
Cardinal Health, Inc.:
|
|
|
|
|
|
||||||
Gross product sales
|
$
|
7,475
|
|
|
$
|
7,049
|
|
|
$
|
6,520
|
|
% of total gross revenues
|
20
|
%
|
|
20
|
%
|
|
20
|
%
|
|||
% of U.S. gross product sales
|
24
|
%
|
|
24
|
%
|
|
24
|
%
|
|
2018 Quarters ended
|
||||||||||||||
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
||||||||
Product sales
|
$
|
6,001
|
|
|
$
|
5,510
|
|
|
$
|
5,679
|
|
|
$
|
5,343
|
|
Gross profit from product sales
|
$
|
4,905
|
|
|
$
|
4,473
|
|
|
$
|
4,655
|
|
|
$
|
4,399
|
|
Net income
|
$
|
1,928
|
|
|
$
|
1,859
|
|
|
$
|
2,296
|
|
|
$
|
2,311
|
|
Earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
3.04
|
|
|
$
|
2.88
|
|
|
$
|
3.50
|
|
|
$
|
3.27
|
|
Diluted
|
$
|
3.01
|
|
|
$
|
2.86
|
|
|
$
|
3.48
|
|
|
$
|
3.25
|
|
|
2017 Quarters ended
|
||||||||||||||
|
December 31
|
|
September 30
|
|
June 30
|
|
March 31
|
||||||||
Product sales
|
$
|
5,569
|
|
|
$
|
5,453
|
|
|
$
|
5,574
|
|
|
$
|
5,199
|
|
Gross profit from product sales
|
$
|
4,510
|
|
|
$
|
4,463
|
|
|
$
|
4,550
|
|
|
$
|
4,203
|
|
Net (loss) income
|
$
|
(4,264
|
)
|
|
$
|
2,021
|
|
|
$
|
2,151
|
|
|
$
|
2,071
|
|
(Loss) earnings per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
(5.89
|
)
|
|
$
|
2.78
|
|
|
$
|
2.93
|
|
|
$
|
2.81
|
|
Diluted
(1)
|
$
|
(5.89
|
)
|
|
$
|
2.76
|
|
|
$
|
2.91
|
|
|
$
|
2.79
|
|
(1)
|
During periods of net loss, diluted loss per share is equal to basic loss per share because the antidilutive effect of potential common shares is disregarded.
|
Allowance for doubtful accounts
|
|
Balance
at beginning
of period
|
|
Additions
charged to
costs and
expenses
|
|
Other
additions
|
|
Deductions
|
|
Balance
at end
of period
|
||||||||||
Year ended December 31, 2018
|
|
$
|
51
|
|
|
$
|
1
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
48
|
|
Year ended December 31, 2017
|
|
$
|
51
|
|
|
$
|
4
|
|
|
$
|
—
|
|
|
$
|
4
|
|
|
$
|
51
|
|
Year ended December 31, 2016
|
|
$
|
55
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
51
|
|
Plan:
|
Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, as amended and/or restated from time to time
|
Grant Price:
|
$________
|
Expiration Date:
|
The [______ (__
th
)] anniversary of the date of this Award
|
Vesting Schedule:
|
Means the schedule of vesting set forth under Vesting Details
|
Vesting Details:
|
Means the presentation (tabular or otherwise) of the Vesting Date and the quantity of Shares vesting.
|
a.
|
the terms and conditions of this Option, including
Appendix A
, are deemed modified to the extent necessary or advisable to comply with applicable foreign laws or facilitate the administration to the Plan;
|
b.
|
if applicable, the effectiveness of this Option is conditioned upon its compliance with any applicable foreign laws, regulations, rules or local governmental regulatory exemption and subject to receipt of any required foreign regulatory approvals; and
|
c.
|
the Company may take any other action before or after the date of this Option that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals.
|
(2)
|
The Plan and your participation in the Plan are offered by Amgen Inc. on a wholly discretionary basis.
|
(4)
|
Amgen Inc. and its Affiliates are not responsible for any decrease in the value of the Option granted and/or Shares issued under the Plan.
|
(1)
|
Su participación en el Plan de ninguna manera constituye un derecho adquirido.
|
(2)
|
El Plan y su participación en el mismo son ofrecidos por Amgen Inc. de forma completamente discrecional.
|
(4)
|
Amgen Inc. y sus Afiliados no son responsables de ninguna disminución en el valor de la opción otorgada y/o de las Acciones Comunes emitidas mediante el Plan.
|
Plan:
|
Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, as amended and/or restated from time to time
|
Grant Price:
|
$________
|
Vesting Schedule:
|
Means the schedule of vesting set forth under Vesting Details
|
Vesting Details:
|
Means the presentation (tabular or otherwise) of the Vesting Date and the quantity of Shares vesting
|
a.
|
General.
Subject to the terms and conditions of this Agreement, on each Vesting Date, the Number of Units indicated on the Vesting Schedule shall vest, provided that you have remained continuously and actively employed with the Company or an Affiliate (as defined in the Plan) through each applicable Vesting Date, unless (i) [your employment has terminated due to your Voluntary Termination (as defined in paragraph (d) of this Section I below) ]*, [(ii)] you experience a Qualified Termination (as defined below), or (iii)[(ii)] as otherwise determined by the Company in the exercise of its discretion as provided in paragraph (f) of this Section I. The Units represent an unfunded, unsecured promise by the Company to deliver Shares. Only whole Shares shall be issued upon vesting of the Units, and the Company shall be under no obligation to issue any fractional Shares to you. If your employment with the Company or an Affiliate is terminated for any reason or for no reason, including if your active employment is terminated by the Company or an Affiliate without Cause (as defined below), or in the event of any other termination of your active employment caused directly or indirectly by the Company or an Affiliate, except as otherwise provided in paragraphs (b), (c), [(d), ]*
(1)
(e) or (f) of this Section I below, your unvested Units shall automatically expire and terminate on the date of termination of your active employment. Notwithstanding anything herein to the contrary, the Vesting Schedule may be accelerated (by notice in writing) by the Company in its sole discretion at any time that the Units remain outstanding and unvested (in whole or in part). In addition, if not prohibited by local law, vesting may be suspended by the Company in its sole discretion during a leave of absence as provided from time to time according to Company policies and practices.
|
b.
|
Permanent and Total Disability.
Notwithstanding the provisions in paragraph (a) above, if your employment with the Company or an Affiliate terminates due to your Permanent and Total Disability (as defined below), then the vesting of Units granted under this Agreement shall be accelerated, subject to your execution of a general release and waiver in a form provided by the Company, to vest as of the day immediately preceding such termination of your employment with respect to all Units granted hereunder, except that if the Units were granted in the calendar year in which such termination occurs, the Units shall be accelerated to vest with respect to a number of Units equal to the number of Units subject to this Agreement multiplied by a fraction, the numerator of which is the number of complete months you remained continuously and actively employed during such calendar year, and the denominator of which is twelve (12), and any Units that remain unvested shall automatically expire and terminate on the date of the termination of your active employment due to your Permanent and Total Disability without consideration therefor.
|
c.
|
Death
. Notwithstanding the provisions in paragraph (a) above, if your employment with the Company or an Affiliate terminates due to your death, then the vesting of Units granted under this Agreement shall be accelerated to vest as of the day immediately preceding your death with respect to all Units granted hereunder, except that if the Units were granted in the calendar year in which your death occurs the Units shall be accelerated to vest with respect to a number of Units equal to the number of Units subject to this Agreement multiplied by a fraction, the numerator of which is the number of complete months you remained continuously and actively employed during such calendar year, and the denominator of which is twelve (12), and any Units that remain unvested shall automatically expire and terminate on the date of the termination of your active employment due to your death without consideration therefor.
|
d.
|
[Retirement
.
Notwithstanding the provisions in paragraph (a) above, if you terminate your employment with the Company or an Affiliate due to your voluntary termination (and such voluntary termination is not the result of Permanent and Total Disability (as defined below)) after you are at least sixty-five (65) years of age, or after you are at least fifty-five (55) years of age and have been an employee of the Company and/or an Affiliate for at least ten (10) years in the aggregate as determined by the Company in its sole discretion according to Company policies and practices as in effect from time to time (“
Voluntary Termination
”), then the Units will vest pursuant to the Vesting Schedule without regard to the termination of employment prior to the Vesting Date, subject to your execution of a general release and waiver in a form provided by the Company, with respect to all Units granted hereunder; provided, however, that if the Units were granted in the calendar year in which the Voluntary Termination occurs, the Units will vest pursuant to the Vesting Schedule provided in the Award Notice, provided, that each tranche of Units scheduled to vest upon each remaining Vesting Date in the Vesting Schedule will vest only with respect to the number of Units in such tranche multiplied by a fraction, the numerator of which is the number of complete months you remained continuously and actively employed during such calendar year, and the denominator of
|
e.
|
Qualified Termination after a Change of Control
. Notwithstanding the provisions in paragraph (a) above, in the event of a Qualified Termination (as defined below), then, to the extent permitted by applicable law, the vesting of Units granted under this Agreement shall be accelerated to vest as of the day immediately prior to the Qualified Termination.
|
f.
|
Continued Vesting
. Notwithstanding the provisions in paragraph (a) above, the Company may in its sole discretion at any time during the term of this Agreement, in writing, otherwise provide that the Units will vest pursuant to the Vesting Schedule without regard to the termination of employment prior to the Vesting Date, subject to any terms and conditions that the Company may determine.
|
(a)
|
if you are an employee who participates in the Change of Control Plan (as defined below), your termination of employment within two (2) years following a Change of Control (i) by the Company other than for Cause, Disability (as defined below), or as a result of your death or (ii) by you for Good Reason (as defined in the Change of Control Plan); or
|
(b)
|
if you are an employee who does not participate in the Change of Control Plan or the Change of Control Plan is no longer in effect, your termination of employment within two (2) years following a Change of Control by the Company other than for Cause, Disability (as defined below), or as a result of your death;
|
a.
|
the terms and conditions of this Agreement, including
Appendix A
, are deemed modified to the extent necessary or advisable to comply with applicable foreign laws or facilitate the administration of the Plan;
|
b.
|
if applicable, the effectiveness of your award of Units is conditioned upon its compliance with any applicable foreign laws, regulations, rules or local governmental regulatory exemption and subject to receipt of any required foreign regulatory approvals;
|
c.
|
to the extent necessary to comply with applicable foreign laws, the payment of any earned Units shall be made in cash or Common Stock, at the Company’s election; and
|
d.
|
the Company may take any other action, before or after an award of Units is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals.
|
(2)
|
The Plan and your participation in the Plan are offered by Amgen Inc. on a wholly discretionary basis.
|
(4)
|
Amgen Inc. and its Affiliates are not responsible for any decrease in the value of the Units granted and/or Shares issued under the Plan.
|
(1)
|
Su participación en el Plan de ninguna manera constituye un derecho adquirido.
|
(2)
|
El Plan y su participación en el mismo son ofrecidos por Amgen Inc. de forma completamente discrecional.
|
(4)
|
Amgen Inc. y sus Afiliados no son responsables de ninguna disminución en el valor de Unidades o de las Acciones Comunes emitidas mediante el Plan.
|
Plan:
|
Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, as amended and/or restated from time to time
|
Program
|
Amgen Inc. 2009 Performance Award Program, as amended and/or restated from time to time
|
Performance Period:
|
The Performance Period beginning on and ending on .
|
Resolutions:
|
The Resolutions of the Compensation and Management Development Committee of the Board of Directors of Amgen Inc. establishing the performance goals and Performance Period applicable to this Award.
|
Vesting Schedule:
|
Means the schedule of vesting set forth under Vesting Details
|
Vesting Details:
|
Means the presentation (tabular or otherwise) of the Vesting Date and the quantity of Shares vesting.
|
(2)
|
The Plan and your participation in the Plan and the Program are offered by Amgen Inc. on a wholly discretionary basis.
|
(4)
|
Amgen Inc. and its Affiliates are not responsible for any decrease in the value of any Shares issued with respect to the Award.
|
(1)
|
Su participación en el Plan y en el Programa de ninguna manera constituye un derecho adquirido.
|
(2)
|
Su participación en Plan y en el Programa son ofrecidos por Amgen Inc. de forma completamente discrecional.
|
(4)
|
Amgen Inc. y sus Afiliados no son responsables de ninguna disminución en el valor de las Acciones Comunes emitidas mediante el Plan.
|
|
|
|
|
|
|
SUBSIDIARY
|
|
STATE OF OTHER JURISDICTION OF
|
(Name under which subsidiary does business)
|
|
INCORPORATION OR ORGANIZATION
|
|
|
|
Alantos Pharmaceuticals Holdings
|
|
Delaware
|
Amgen Canada Inc.
|
|
Ontario
|
Amgen (Europe) GmbH
|
|
Switzerland
|
Amgen Fremont Inc.
|
|
Delaware
|
Amgen Global Finance B.V.
|
|
Netherlands
|
Amgen GmbH Germany
|
|
Germany
|
Amgen Holding No. 1 Limited
|
|
Bermuda
|
Amgen Ilac Ticaret Limited Sirketi
|
|
Turkey
|
Amgen K-A, Inc.
|
|
Delaware
|
Amgen Manufacturing, Limited
|
|
Bermuda
|
Amgen Research (Munich) GmbH
|
|
Germany
|
Amgen Rockville, Inc.
|
|
Delaware
|
Amgen S.A.S.
|
|
France
|
Amgen Singapore Manufacturing Pte. Ltd.
|
|
Singapore
|
Amgen SF, LLC
|
|
Delaware
|
Amgen Technology (Ireland) Unlimited Company
|
|
Ireland
|
Amgen Technology, Limited
|
|
Bermuda
|
Amgen USA Inc.
|
|
Delaware
|
Amgen Worldwide Holdings B.V.
|
|
Netherlands
|
ATL Holdings Limited
|
|
Bermuda
|
ATL Holdings II Limited
|
|
Bermuda
|
BioVex, Inc.
|
|
Delaware
|
Immunex Corporation
|
|
Washington
|
Mustafa Nevzat Ilac Sanayii Anonim Sirketi
|
|
Turkey
|
Onyx Pharmaceuticals, Inc.
|
|
Delaware
|
Onyx Therapeutics, Inc.
|
|
Delaware
|
|
|
|
1.
|
I have reviewed this Annual Report on Form 10-K of Amgen Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
|
(d)
|
Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 13, 2019
|
/s/ ROBERT A. BRADWAY
|
|
Robert A. Bradway
|
|
Chairman of the Board,
|
|
Chief Executive Officer and President
|
1.
|
I have reviewed this Annual Report on Form 10-K of Amgen Inc.;
|
2.
|
Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this annual report;
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual report based on such evaluation; and
|
(d)
|
Disclosed in this annual report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
Date: February 13, 2019
|
/s/ DAVID W. MELINE
|
|
David W. Meline
|
|
Executive Vice President and Chief Financial Officer
|
(i)
|
the accompanying Annual Report on Form 10-K of the Company for the period ended
December 31, 2018
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 13, 2019
|
/s/ ROBERT A. BRADWAY
|
|
Robert A. Bradway
|
|
Chairman of the Board,
|
|
Chief Executive Officer and President
|
(i)
|
the accompanying Annual Report on Form 10-K of the Company for the period ended
December 31, 2018
(the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
|
(ii)
|
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
Date: February 13, 2019
|
/s/ DAVID W. MELINE
|
|
David W. Meline
|
|
Executive Vice President and Chief Financial Officer
|