Delaware
|
001-01136
|
22-0790350
|
(State or Other Jurisdiction of Incorporation)
|
(Commission File Number)
|
(IRS Employer Identification Number)
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
Common Stock, $0.10 Par Value
|
BMY
|
New York Stock Exchange
|
||
1.000% Notes due 2025
|
BMY25
|
New York Stock Exchange
|
||
1.750% Notes due 2035
|
BMY35
|
New York Stock Exchange
|
||
Bristol-Myers Squibb Contingent Value Rights
|
BMY RT
|
New York Stock Exchange
|
||
Celgene Contingent Value Rights
|
CELG RT
|
New York Stock Exchange
|
Item 2.01. |
Completion of Acquisition or Disposition of Assets.
|
Item 9.01. |
Financial Statements and Exhibits.
|
(a) |
Financial Statements of Businesses Acquired.
|
(b) |
Pro Forma Financial Information.
|
(d) |
Exhibits
|
Exhibit
No.
|
Description
|
|
23.1
|
Consent of KPMG LLP, independent registered public accounting firm of Celgene Corporation.
|
|
99.1
|
The historical audited consolidated financial statements and financial statement schedule of Celgene Corporation as of December 31, 2018 and 2017 and for each of
the years in the three-year period ended December 31, 2018, the notes related thereto and the related reports of KPMG LLP, Celgene’s independent registered public accounting firm.
|
|
99.2
|
The unaudited condensed consolidated financial statements of Celgene Corporation and related notes for the nine-months ended September 30, 2019.
|
|
99.3
|
Unaudited pro forma condensed combined financial information of Bristol-Myers Squibb Company, giving effect to the acquisition of Celgene Corporation and Celgene Corporation’s
disposition of the OTEZLA® (apremilast) product line, which includes the unaudited pro forma condensed combined balance sheet as of September 30, 2019, the unaudited pro forma condensed combined statements of earnings for the
year ended December 31, 2018 and for the nine-months ended September 30, 2019, and the notes related thereto.
|
|
104
|
The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101).
|
Exhibit
No.
|
Description
|
|
Consent of KPMG LLP, independent registered public accounting firm of Celgene Corporation.
|
||
The historical audited consolidated financial statements and financial statement schedule of Celgene Corporation as of December 31, 2018 and 2017 and for each of
the years in the three-year period ended December 31, 2018, the notes related thereto and the related reports of KPMG LLP, Celgene’s independent registered public accounting firm.
|
||
The unaudited condensed consolidated financial statements of Celgene Corporation and related notes for the nine-months ended September 30, 2019.
|
||
Unaudited pro forma condensed combined financial information of Bristol-Myers Squibb Company, giving effect to the acquisition of Celgene Corporation and Celgene Corporation’s
disposition of the OTEZLA® (apremilast) product line, which includes the unaudited pro forma condensed combined balance sheet as of September 30, 2019, the unaudited pro forma condensed combined statements of earnings for the
year ended December 31, 2018 and for the nine-months ended September 30, 2019, and the notes related thereto.
|
||
104
|
The cover page from this Current Report on Form 8-K formatted in Inline XBRL (included as Exhibit 101).
|
BRISTOL-MYERS SQUIBB COMPANY
|
||
Dated: February 5, 2020
|
By:
|
/s/Katherine R. Kelly
|
Name:
|
Katherine R. Kelly
|
|
Title:
|
Corporate Secretary
|
|
December 31,
|
||||||
|
2018
|
|
2017
|
||||
Assets
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
4,234
|
|
|
$
|
7,013
|
|
Debt securities available-for-sale
|
496
|
|
|
3,219
|
|
||
Equity investments with readily determinable fair values
|
1,312
|
|
|
1,810
|
|
||
Accounts receivable, net of allowances of $38 and $36 as of December 31, 2018 and 2017, respectively
|
2,066
|
|
|
1,921
|
|
||
Inventory
|
458
|
|
|
541
|
|
||
Other current assets
|
501
|
|
|
388
|
|
||
Total current assets
|
9,067
|
|
|
14,892
|
|
||
Property, plant and equipment, net
|
1,367
|
|
|
1,070
|
|
||
Intangible assets, net
|
16,213
|
|
|
8,436
|
|
||
Goodwill
|
8,003
|
|
|
4,866
|
|
||
Other non-current assets
|
830
|
|
|
877
|
|
||
Total assets
|
$
|
35,480
|
|
|
$
|
30,141
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term borrowings and current portion of long-term debt
|
$
|
501
|
|
|
$
|
—
|
|
Accounts payable
|
418
|
|
|
305
|
|
||
Accrued expenses and other current liabilities
|
2,987
|
|
|
2,523
|
|
||
Income taxes payable
|
78
|
|
|
84
|
|
||
Current portion of deferred revenue
|
73
|
|
|
75
|
|
||
Total current liabilities
|
4,057
|
|
|
2,987
|
|
||
Deferred revenue, net of current portion
|
73
|
|
|
34
|
|
||
Income taxes payable
|
2,190
|
|
|
2,490
|
|
||
Deferred income tax liabilities
|
2,753
|
|
|
1,327
|
|
||
Other non-current liabilities
|
477
|
|
|
544
|
|
||
Long-term debt, net of discount
|
19,769
|
|
|
15,838
|
|
||
Total liabilities
|
29,319
|
|
|
23,220
|
|
||
Commitments and Contingencies (Note 19)
|
|
|
|
||||
Stockholders’ Equity:
|
|
|
|
||||
Preferred stock, $.01 par value per share, 5.0 million shares authorized; none outstanding as of December 31, 2018 and 2017, respectively
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value per share, 1,150.0 million shares authorized; issued 981.5 million and 971.7 million shares as of December 31, 2018 and 2017,
respectively
|
10
|
|
|
10
|
|
||
Common stock in treasury, at cost; 281.3 million and 212.4 million shares as of December 31, 2018 and 2017, respectively
|
(26,336
|
)
|
|
(20,243
|
)
|
||
Additional paid-in capital
|
14,978
|
|
|
13,806
|
|
||
Retained earnings
|
17,559
|
|
|
13,061
|
|
||
Accumulated other comprehensive (loss) income
|
(50
|
)
|
|
287
|
|
||
Total stockholders’ equity
|
6,161
|
|
|
6,921
|
|
||
Total liabilities and stockholders’ equity
|
$
|
35,480
|
|
|
$
|
30,141
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Revenue:
|
|
|
|
|
|
||||||
Net product sales
|
$
|
15,265
|
|
|
$
|
12,973
|
|
|
$
|
11,185
|
|
Other revenue
|
16
|
|
|
30
|
|
|
44
|
|
|||
Total revenue
|
15,281
|
|
|
13,003
|
|
|
11,229
|
|
|||
Expenses:
|
|
|
|
|
|
||||||
Cost of goods sold (excluding amortization of acquired intangible assets)
|
587
|
|
|
461
|
|
|
438
|
|
|||
Research and development
|
5,673
|
|
|
5,915
|
|
|
4,470
|
|
|||
Selling, general and administrative
|
3,250
|
|
|
2,941
|
|
|
2,658
|
|
|||
Amortization of acquired intangible assets
|
468
|
|
|
329
|
|
|
459
|
|
|||
Acquisition related charges (gains) and restructuring, net
|
112
|
|
|
(1,350
|
)
|
|
38
|
|
|||
Total costs and expenses
|
10,090
|
|
|
8,296
|
|
|
8,063
|
|
|||
Operating income
|
5,191
|
|
|
4,707
|
|
|
3,166
|
|
|||
Other income and (expense):
|
|
|
|
|
|
||||||
Interest and investment income, net
|
45
|
|
|
105
|
|
|
30
|
|
|||
Interest (expense)
|
(741
|
)
|
|
(522
|
)
|
|
(500
|
)
|
|||
Other income (expense), net
|
337
|
|
|
24
|
|
|
(324
|
)
|
|||
Income before income taxes
|
4,832
|
|
|
4,314
|
|
|
2,372
|
|
|||
Income tax provision
|
786
|
|
|
1,374
|
|
|
373
|
|
|||
Net income
|
$
|
4,046
|
|
|
$
|
2,940
|
|
|
$
|
1,999
|
|
|
|
|
|
|
|
||||||
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
5.65
|
|
|
$
|
3.77
|
|
|
$
|
2.57
|
|
Diluted
|
$
|
5.51
|
|
|
$
|
3.64
|
|
|
$
|
2.49
|
|
Weighted average shares:
|
|
|
|
|
|
||||||
Basic
|
716.3
|
|
|
779.2
|
|
|
777.2
|
|
|||
Diluted
|
733.8
|
|
|
808.7
|
|
|
803.3
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
$
|
4,046
|
|
|
$
|
2,940
|
|
|
$
|
1,999
|
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
|
|||
Foreign currency translation adjustments
|
(28
|
)
|
|
70
|
|
|
(26
|
)
|
|||
Pension liability adjustment
|
(6
|
)
|
|
16
|
|
|
(24
|
)
|
|||
|
|
|
|
|
|
||||||
Net unrealized gains (losses) related to cash flow hedges:
|
|
|
|
|
|
|
|
|
|||
Unrealized holding gains (losses)
|
245
|
|
|
(434
|
)
|
|
145
|
|
|||
Tax benefit (expense)
|
1
|
|
|
6
|
|
|
(13
|
)
|
|||
Unrealized holding gains (losses), net of tax
|
246
|
|
|
(428
|
)
|
|
132
|
|
|||
|
|
|
|
|
|
||||||
Reclassification adjustment for losses (gains) included in net income
|
7
|
|
|
(178
|
)
|
|
(300
|
)
|
|||
Tax (benefit)
|
(1
|
)
|
|
(3
|
)
|
|
(3
|
)
|
|||
Reclassification adjustment for losses (gains) included in net income, net of tax
|
6
|
|
|
(181
|
)
|
|
(303
|
)
|
|||
|
|
|
|
|
|
||||||
Excluded component related to cash flow hedges:
|
|
|
|
|
|
||||||
Amortization of excluded component (gains)
|
(20
|
)
|
|
(15
|
)
|
|
—
|
|
|||
Reclassification of realized excluded component losses to net income
|
28
|
|
|
18
|
|
|
—
|
|
|||
Net reclassification adjustment included in net income
|
8
|
|
|
3
|
|
|
—
|
|
|||
|
|
|
|
|
|
||||||
Net unrealized (losses) gains on available for sale debt / marketable securities (see Note 1):
|
|
|
|
|
|
||||||
Unrealized holding (losses) gains
|
(9
|
)
|
|
611
|
|
|
(563
|
)
|
|||
Tax benefit (expense)
|
2
|
|
|
(216
|
)
|
|
203
|
|
|||
Unrealized holding (losses) gains, net of tax
|
(7
|
)
|
|
395
|
|
|
(360
|
)
|
|||
|
|
|
|
|
|
||||||
Reclassification adjustment for losses included in net income
|
18
|
|
|
37
|
|
|
358
|
|
|||
Tax (benefit)
|
(4
|
)
|
|
(14
|
)
|
|
(126
|
)
|
|||
Reclassification adjustment for losses included in net income, net of tax
|
14
|
|
|
23
|
|
|
232
|
|
|||
Total other comprehensive income (loss)
|
233
|
|
|
(102
|
)
|
|
(349
|
)
|
|||
Comprehensive income
|
$
|
4,279
|
|
|
$
|
2,838
|
|
|
$
|
1,650
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
4,046
|
|
|
$
|
2,940
|
|
|
$
|
1,999
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation
|
160
|
|
|
134
|
|
|
121
|
|
|||
Amortization
|
475
|
|
|
337
|
|
|
384
|
|
|||
Impairment charges
|
31
|
|
|
1,679
|
|
|
489
|
|
|||
Deferred income taxes
|
32
|
|
|
(1,330
|
)
|
|
(344
|
)
|
|||
Change in value of contingent consideration and success payments
|
19
|
|
|
(1,350
|
)
|
|
21
|
|
|||
Gain on sale of business
|
—
|
|
|
—
|
|
|
(38
|
)
|
|||
Net loss (gain) on sales of debt securities available-for-sale and equity investments
|
18
|
|
|
(61
|
)
|
|
(7
|
)
|
|||
Fair value adjustments on equity investments
|
(317
|
)
|
|
—
|
|
|
—
|
|
|||
Share-based compensation expense
|
921
|
|
|
644
|
|
|
606
|
|
|||
Share-based employee benefit plan expense
|
33
|
|
|
34
|
|
|
40
|
|
|||
Derivative instruments
|
3
|
|
|
72
|
|
|
169
|
|
|||
Other, net
|
(15
|
)
|
|
(24
|
)
|
|
(10
|
)
|
|||
Change in current assets and liabilities, excluding the effect of acquisitions:
|
|
|
|
|
|
||||||
Accounts receivable
|
(178
|
)
|
|
(236
|
)
|
|
(222
|
)
|
|||
Inventory
|
82
|
|
|
(42
|
)
|
|
(55
|
)
|
|||
Other operating assets
|
(55
|
)
|
|
(73
|
)
|
|
94
|
|
|||
Accounts payable and other operating liabilities
|
290
|
|
|
273
|
|
|
619
|
|
|||
Income tax payable
|
(393
|
)
|
|
2,229
|
|
|
301
|
|
|||
Payment of contingent consideration
|
(22
|
)
|
|
—
|
|
|
(9
|
)
|
|||
Deferred revenue
|
41
|
|
|
20
|
|
|
7
|
|
|||
Net cash provided by operating activities
|
5,171
|
|
|
5,246
|
|
|
4,165
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Proceeds from sales of debt securities available-for-sale
|
3,388
|
|
|
5,872
|
|
|
633
|
|
|||
Purchases of debt securities available-for-sale
|
(675
|
)
|
|
(8,163
|
)
|
|
(1,106
|
)
|
|||
Capital expenditures
|
(330
|
)
|
|
(279
|
)
|
|
(236
|
)
|
|||
Proceeds from sales of equity investment securities
|
96
|
|
|
116
|
|
|
15
|
|
|||
Purchases of equity investment securities
|
(249
|
)
|
|
(410
|
)
|
|
(307
|
)
|
|||
Payments for acquisition of businesses, net of cash acquired
|
(8,648
|
)
|
|
—
|
|
|
—
|
|
|||
Other
|
—
|
|
|
(27
|
)
|
|
(1
|
)
|
|||
Net cash used in investing activities
|
(6,418
|
)
|
|
(2,891
|
)
|
|
(1,002
|
)
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Payment for treasury shares
|
(6,096
|
)
|
|
(3,833
|
)
|
|
(2,160
|
)
|
|||
Proceeds from short-term borrowing
|
5,709
|
|
|
—
|
|
|
100
|
|
|||
Principal repayments on short-term borrowing
|
(5,709
|
)
|
|
—
|
|
|
(100
|
)
|
|||
Proceeds from the issuance of long-term debt
|
4,452
|
|
|
3,468
|
|
|
—
|
|
|||
Repayments of long-term debt
|
—
|
|
|
(1,904
|
)
|
|
—
|
|
|||
Net proceeds from common equity put options
|
—
|
|
|
—
|
|
|
8
|
|
|||
Payment of contingent consideration
|
(40
|
)
|
|
—
|
|
|
(41
|
)
|
|||
Net proceeds from share-based compensation arrangements
|
144
|
|
|
685
|
|
|
359
|
|
|||
Net cash used in financing activities
|
(1,540
|
)
|
|
(1,584
|
)
|
|
(1,834
|
)
|
|||
Effect of currency rate changes on cash and cash equivalents
|
8
|
|
|
72
|
|
|
(39
|
)
|
|||
Net (decrease) increase in cash and cash equivalents
|
(2,779
|
)
|
|
843
|
|
|
1,290
|
|
|||
Cash and cash equivalents at beginning of period
|
7,013
|
|
|
6,170
|
|
|
4,880
|
|
|||
Cash and cash equivalents at end of period
|
$
|
4,234
|
|
|
$
|
7,013
|
|
|
$
|
6,170
|
|
|
Years Ended December 31,
|
||||||||||
|
2018
|
|
2017
|
|
2016
|
||||||
Supplemental schedule of non-cash investing and financing activity:
|
|
|
|
|
|
||||||
Change in net unrealized loss (gain) on debt securities available-for-sale/marketable securities available-for-sale
|
$
|
9
|
|
|
$
|
(611
|
)
|
|
$
|
563
|
|
Investment in Human Longevity, Inc. common stock
|
—
|
|
|
—
|
|
|
40
|
|
|||
Investment in Celularity, Inc. common stock
|
—
|
|
|
22
|
|
|
—
|
|
|||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||||||
Interest paid
|
$
|
689
|
|
|
$
|
539
|
|
|
$
|
527
|
|
Income taxes paid
|
1,165
|
|
|
475
|
|
|
373
|
|
Years Ended December 31, 2018, 2017 and 2016
|
|
Common
Stock
|
|
Treasury
Stock
|
|
Additional
Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated Other Comprehensive Income (Loss)
|
|
Stockholders’
Equity
|
||||||||||||
Balances as of December 31, 2015
|
|
$
|
9
|
|
|
$
|
(14,052
|
)
|
|
$
|
11,119
|
|
|
$
|
8,075
|
|
|
$
|
768
|
|
|
$
|
5,919
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,999
|
|
|
—
|
|
|
1,999
|
|
||||||
Other comprehensive (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(349
|
)
|
|
(349
|
)
|
||||||
Exercise of stock options and conversion of restricted stock units
|
|
1
|
|
|
(105
|
)
|
|
453
|
|
|
—
|
|
|
—
|
|
|
349
|
|
||||||
Shares purchased under share repurchase program
|
|
—
|
|
|
(2,160
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,160
|
)
|
||||||
Issuance of common stock for employee benefit plans
|
|
—
|
|
|
36
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
51
|
|
||||||
Expense related to share-based compensation
|
|
—
|
|
|
—
|
|
|
606
|
|
|
—
|
|
|
—
|
|
|
606
|
|
||||||
Income tax benefit upon exercise of stock options
|
|
—
|
|
|
—
|
|
|
185
|
|
|
—
|
|
|
—
|
|
|
185
|
|
||||||
Balances as of December 31, 2016
|
|
$
|
10
|
|
|
$
|
(16,281
|
)
|
|
$
|
12,378
|
|
|
$
|
10,074
|
|
|
$
|
419
|
|
|
$
|
6,600
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,940
|
|
|
—
|
|
|
2,940
|
|
||||||
Other comprehensive (loss)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(102
|
)
|
|
(102
|
)
|
||||||
Exercise of stock options and conversion of
restricted stock units
|
|
—
|
|
|
(83
|
)
|
|
776
|
|
|
—
|
|
|
—
|
|
|
693
|
|
||||||
Shares purchased under share repurchase program
|
|
—
|
|
|
(3,911
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,911
|
)
|
||||||
Issuance of common stock for employee benefit plans
|
|
—
|
|
|
32
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
40
|
|
||||||
Expense related to share-based compensation
|
|
—
|
|
|
—
|
|
|
644
|
|
|
—
|
|
|
—
|
|
|
644
|
|
||||||
Adoption of ASU 2016-09 and ASU 2017-12
|
|
—
|
|
|
—
|
|
|
—
|
|
|
47
|
|
|
(30
|
)
|
|
17
|
|
||||||
Balances as of December 31, 2017
|
|
$
|
10
|
|
|
$
|
(20,243
|
)
|
|
$
|
13,806
|
|
|
$
|
13,061
|
|
|
$
|
287
|
|
|
$
|
6,921
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,046
|
|
|
—
|
|
|
4,046
|
|
||||||
Other comprehensive income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
233
|
|
|
233
|
|
||||||
Exercise of stock options and conversion of
restricted stock units
|
|
—
|
|
|
(104
|
)
|
|
248
|
|
|
—
|
|
|
—
|
|
|
144
|
|
||||||
Shares purchased under share repurchase program
|
|
—
|
|
|
(6,020
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,020
|
)
|
||||||
Issuance of common stock for employee benefit plans
|
|
—
|
|
|
31
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
34
|
|
||||||
Expense related to share-based compensation
|
|
—
|
|
|
—
|
|
|
921
|
|
|
—
|
|
|
—
|
|
|
921
|
|
||||||
Adoption of ASU 2014-09, ASU 2016-01, ASU2018-03, ASU 2018-02 and ASU 2016-16 (Note 1)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
452
|
|
|
(570
|
)
|
|
(118
|
)
|
||||||
Balances as of December 31, 2018
|
|
$
|
10
|
|
|
$
|
(26,336
|
)
|
|
$
|
14,978
|
|
|
$
|
17,559
|
|
|
$
|
(50
|
)
|
|
$
|
6,161
|
|
|
December 31, 2017
|
||||||
|
As Reported
|
|
As Revised
|
||||
Marketable securities available-for-sale
|
$
|
5,029
|
|
|
N/A
|
|
|
Debt securities available-for-sale
|
N/A
|
|
|
$
|
3,219
|
|
|
Equity investments with readily determinable fair values
|
N/A
|
|
|
1,810
|
|
|
Year Ended December 31, 2017
|
|
Year Ended December 31, 2016
|
||||||||||||
|
As Reported
|
|
As Revised
|
|
As Reported
|
|
As Revised
|
||||||||
Purchases of marketable securities available for sale
|
$
|
(8,478
|
)
|
|
N/A
|
|
|
$
|
(1,281
|
)
|
|
N/A
|
|
||
Purchases of investment securities
|
(95
|
)
|
|
N/A
|
|
|
(132
|
)
|
|
N/A
|
|
||||
Purchases of debt securities available-for-sale
|
N/A
|
|
|
$
|
(8,163
|
)
|
|
N/A
|
|
|
$
|
(1,106
|
)
|
||
Purchases of equity investment securities
|
N/A
|
|
|
(410
|
)
|
|
N/A
|
|
|
(307
|
)
|
||||
Proceeds from sales of marketable securities available-for-sale
|
5,968
|
|
|
N/A
|
|
|
633
|
|
|
N/A
|
|
||||
Proceeds from sales of investment securities
|
20
|
|
|
N/A
|
|
|
15
|
|
|
N/A
|
|
||||
Proceeds from sales of debt securities available-for-sale
|
N/A
|
|
|
5,872
|
|
|
N/A
|
|
|
633
|
|
||||
Proceeds from sales of equity investment securities
|
N/A
|
|
|
116
|
|
|
N/A
|
|
|
15
|
|
•
|
cash flow hedges included in the assessment of hedge effectiveness in OCI. The amounts recorded in OCI will subsequently be reclassified
to earnings in the same line item in the Consolidated Statements of Income as impacted by the hedged item when the
hedged item affects earnings; and
|
•
|
fair value hedges included in the assessment of hedge effectiveness in the same line item in the Consolidated Statements of Income that is used to present the earnings effect of the hedged item.
|
Buildings
|
40 years
|
Building and operating equipment
|
15 years
|
Manufacturing machinery and equipment
|
10 years
|
Other machinery and equipment
|
5 years
|
Furniture and fixtures
|
5 years
|
Computer equipment and software
|
3-7 years
|
•
|
We applied the provisions of the standard only to contracts that were not completed as of January 1, 2018; and
|
•
|
We did not retrospectively restate contracts for contract modifications executed before the beginning of the earliest period presented.
|
|
Retained Earnings
Increase / (Decrease)
|
|
AOCI
Increase / (Decrease)
|
||||
ASU 2014-09
|
$
|
4
|
|
|
$
|
—
|
|
ASU 2016-01
|
687
|
|
|
(687
|
)
|
||
ASU 2018-03
|
44
|
|
|
—
|
|
||
ASU 2018-02
|
(117
|
)
|
|
117
|
|
||
ASU 2016-16
|
(166
|
)
|
|
—
|
|
||
Net cumulative effect adjustments to Retained earnings and AOCI on January 1, 2018 due to the adoption of new accounting standards
|
$
|
452
|
|
|
$
|
(570
|
)
|
|
|
Years Ended December 31,
|
||||||||||
|
|
2018
|
|
2017
|
|
2016
|
||||||
Gross Product Sales
|
|
$
|
18,270
|
|
|
$
|
15,138
|
|
|
$
|
12,787
|
|
Gross-to-Net Adjustments:
|
|
|
|
|
|
|
||||||
Government Rebates
|
|
(1,076
|
)
|
|
(890
|
)
|
|
(688
|
)
|
|||
Chargebacks and Distributor Services Fees
|
|
(1,641
|
)
|
|
(1,074
|
)
|
|
(750
|
)
|
|||
Sales Discounts
|
|
(243
|
)
|
|
(193
|
)
|
|
(153
|
)
|
|||
Sales Returns and Allowances
|
|
(45
|
)
|
|
(8
|
)
|
|
(11
|
)
|
|||
Total Gross-to-Net Adjustments
|
|
(3,005
|
)
|
|
(2,165
|
)
|
|
(1,602
|
)
|
|||
Net Product Sales
|
|
$
|
15,265
|
|
|
$
|
12,973
|
|
|
$
|
11,185
|
|
|
|
|
Years Ended December 31,
|
||||||||||
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Hematology / Oncology:
|
|
|
|
|
|
|
|
||||||
REVLIMID®
|
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
$
|
6,469
|
|
|
$
|
5,426
|
|
|
$
|
4,417
|
|
|
International
|
|
3,216
|
|
|
2,761
|
|
|
2,557
|
|
|||
|
Worldwide
|
|
9,685
|
|
|
8,187
|
|
|
6,974
|
|
|||
POMALYST®/IMNOVID®
|
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
1,391
|
|
|
1,008
|
|
|
778
|
|
|||
|
International
|
|
649
|
|
|
606
|
|
|
533
|
|
|||
|
Worldwide
|
|
2,040
|
|
|
1,614
|
|
|
1,311
|
|
|||
ABRAXANE®
|
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
663
|
|
|
607
|
|
|
634
|
|
|||
|
International
|
|
399
|
|
|
385
|
|
|
339
|
|
|||
|
Worldwide
|
|
1,062
|
|
|
992
|
|
|
973
|
|
|||
VIDAZA®
|
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
9
|
|
|
8
|
|
|
12
|
|
|||
|
International
|
|
585
|
|
|
620
|
|
|
596
|
|
|||
|
Worldwide
|
|
594
|
|
|
628
|
|
|
608
|
|
|||
All Other
|
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
208
|
|
|
203
|
|
|
236
|
|
|||
|
International
|
|
68
|
|
|
70
|
|
|
66
|
|
|||
|
Worldwide
|
|
276
|
|
|
273
|
|
|
302
|
|
|||
Total Hematology / Oncology:
|
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
8,740
|
|
|
7,252
|
|
|
6,077
|
|
|||
|
International
|
|
4,917
|
|
|
4,442
|
|
|
4,091
|
|
|||
|
Worldwide
|
|
13,657
|
|
|
11,694
|
|
|
10,168
|
|
|||
|
|
|
|
|
|
|
|
||||||
Inflammation & Immunology:
|
|
|
|
|
|
|
|
||||||
OTEZLA®
|
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
1,275
|
|
|
1,058
|
|
|
904
|
|
|||
|
International
|
|
333
|
|
|
221
|
|
|
113
|
|
|||
|
Worldwide
|
|
1,608
|
|
|
1,279
|
|
|
1,017
|
|
|||
|
|
|
|
|
|
|
|
||||||
Total net product sales
|
|
|
|
|
|
|
|
||||||
|
U.S.
|
|
10,015
|
|
|
8,310
|
|
|
6,981
|
|
|||
|
International
|
|
5,250
|
|
|
4,663
|
|
|
4,204
|
|
|||
|
Worldwide
|
|
15,265
|
|
|
12,973
|
|
|
11,185
|
|
|||
|
|
|
|
|
|
|
|
||||||
Other revenue
|
|
|
16
|
|
|
30
|
|
|
44
|
|
|||
|
|
|
|
|
|
|
|
||||||
Total revenue
|
|
|
$
|
15,281
|
|
|
$
|
13,003
|
|
|
$
|
11,229
|
|
|
Total Consideration
|
||
Cash paid for outstanding common stock at $87.00 per share
|
$
|
9,101
|
|
Celgene investment in Juno at $87.00 per share (1)
|
966
|
|
|
Cash for equity compensation attributable to pre-combination service (2)
|
367
|
|
|
Total consideration
|
$
|
10,434
|
|
|
Amounts Recognized as of the Acquisition Date
|
||
Working capital (1)
|
$
|
452
|
|
IPR&D
|
6,980
|
|
|
Technology platform intangible asset
|
1,260
|
|
|
Property, plant and equipment, net
|
144
|
|
|
Other non-current assets
|
32
|
|
|
Deferred tax liabilities, net
|
(1,530
|
)
|
|
Other non-current liabilities
|
(41
|
)
|
|
Total identifiable net assets
|
7,297
|
|
|
Goodwill
|
3,137
|
|
|
Total net assets acquired
|
$
|
10,434
|
|
Classification in the Consolidated Statements of Income
|
|
Acquisition Date Through December 31, 2018
|
||
Other revenue
|
|
$
|
2
|
|
Research and development (1)
|
|
967
|
|
|
Selling, general and administrative (1)
|
|
312
|
|
|
Amortization of acquired intangible assets
|
|
70
|
|
|
Acquisition related charges (gains) and restructuring, net (2)
|
|
98
|
|
|
Interest and investment income, net
|
|
5
|
|
|
Other income (expense), net
|
|
10
|
|
|
Income tax provision
|
|
(260
|
)
|
|
Total
|
|
$
|
(1,170
|
)
|
|
|
Years Ended December 31,
|
||||||
|
|
2018
|
|
2017
|
||||
Total revenue
|
|
$
|
15,291
|
|
|
$
|
13,029
|
|
Net income
|
|
4,058
|
|
|
2,151
|
|
||
|
|
|
|
|
||||
Net income per common share: basic
|
|
$
|
5.67
|
|
|
$
|
2.76
|
|
Net income per common share: diluted
|
|
$
|
5.53
|
|
|
$
|
2.66
|
|
•
|
Elimination of research related cost sharing transactions between Celgene and Juno;
|
•
|
The pro forma financial information assumes that the acquisition related transaction fees and costs, including post combination
share-based compensation related to the acquisition, were removed from the year ended December 31, 2018 and were
assumed to have been incurred during the first quarter of 2017;
|
•
|
The pro forma financial information assumes that the gain recognized as a result of remeasuring to fair value the equity interest we held
in Juno prior to the business combination was removed from the year ended December 31, 2018 and was assumed to have
been recognized during the first quarter of 2017;
|
•
|
Additional interest expense and amortization of debt issuance costs for a portion of the $4.5 billion of debt that was issued in February 2018 to partially finance the acquisition;
|
•
|
Additional amortization expense on the acquired technology platform asset; and
|
•
|
Statutory tax rates were applied, as appropriate, to each pro forma adjustment based on the jurisdiction in which the adjustment
occurred.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Net income
|
|
$
|
4,046
|
|
|
$
|
2,940
|
|
|
$
|
1,999
|
|
Weighted-average shares:
|
|
|
|
|
|
|
||||||
Basic
|
|
716.3
|
|
|
779.2
|
|
|
777.2
|
|
|||
Effect of dilutive securities:
|
|
|
|
|
|
|
||||||
Options, RSUs, PSUs, warrants and other
|
|
17.5
|
|
|
29.5
|
|
|
26.1
|
|
|||
Diluted
|
|
733.8
|
|
|
808.7
|
|
|
803.3
|
|
|||
Net income per share:
|
|
|
|
|
|
|
||||||
Basic
|
|
$
|
5.65
|
|
|
$
|
3.77
|
|
|
$
|
2.57
|
|
Diluted
|
|
$
|
5.51
|
|
|
$
|
3.64
|
|
|
$
|
2.49
|
|
•
|
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Our level 1 assets consist of
equity investments with readily determinable fair values. Our level 1 liability relates to our publicly traded Abraxis CVRs. See Note 19 for a description of the Abraxis CVRs.
|
•
|
Level 2 inputs utilize observable quoted prices for similar assets and liabilities in active markets and observable quoted prices for
identical or similar assets in markets that are not very active. From time to time, our level 2 assets consist primarily of U.S. Treasury securities, U.S. government-sponsored agency securities, U.S. government-sponsored agency MBS, global
corporate debt securities, asset backed securities, ultra short income fund investments, time deposits and repurchase agreements with original maturities of greater than three months. We also have derivative instruments including foreign
currency forward contracts, purchased currency options, zero-cost collar currency contracts and interest rate swap contracts, which may be in an asset or liability position.
|
•
|
Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for which there is little, if any, market
activity. We do not have any level 3 assets. Our level 3 liabilities consist of contingent consideration related to undeveloped product rights and technology platforms resulting from the acquisitions of Gloucester Pharmaceuticals, Inc.
(Gloucester), Nogra Pharma Limited (Nogra), Avila Therapeutics, Inc. (Avila) and Quanticel Pharmaceuticals, Inc. (Quanticel). In addition, in connection with our acquisition of Juno in the first quarter of 2018, we assumed Juno’s contingent
consideration and success payment liabilities.
|
Inputs
|
Ranges (weighted average) utilized as of:
|
|
December 31, 2018
|
December 31, 2017
|
|
Discount rate
|
3.6 to 4.8% (4.3%)
|
2.7% to 12.0% (3.5%)
|
Probability of payment
|
0% to 68% (5%)
|
0% to 20% (4%)
|
Projected year of payment for development and regulatory milestones
|
2020 to 2029 (2024)
|
2020 to 2029 (2024)
|
Projected year of payment for sales-based milestones and other amounts calculated as a percentage of annual sales
|
N/A
|
2024 to 2030 (2028)
|
|
|
Balance at December 31, 2018
|
|
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Debt securities available-for-sale
|
|
$
|
496
|
|
|
$
|
—
|
|
|
$
|
496
|
|
|
$
|
—
|
|
Equity investments with readily determinable fair values
|
|
1,312
|
|
|
1,312
|
|
|
—
|
|
|
—
|
|
||||
Forward currency contracts
|
|
78
|
|
|
—
|
|
|
78
|
|
|
—
|
|
||||
Total assets
|
|
$
|
1,886
|
|
|
$
|
1,312
|
|
|
$
|
574
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent value rights
|
|
$
|
(19
|
)
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
Zero-cost collar currency contracts
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Other acquisition related contingent consideration and success payments
|
|
(163
|
)
|
|
—
|
|
|
—
|
|
|
(163
|
)
|
||||
Total liabilities
|
|
$
|
(193
|
)
|
|
$
|
(19
|
)
|
|
$
|
(11
|
)
|
|
$
|
(163
|
)
|
|
|
Balance at December 31, 2017
|
|
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||
Debt securities available-for-sale
|
|
$
|
3,219
|
|
|
$
|
—
|
|
|
$
|
3,219
|
|
|
$
|
—
|
|
Equity investments with readily determinable fair values
|
|
1,810
|
|
|
1,810
|
|
|
—
|
|
|
—
|
|
||||
Total assets
|
|
$
|
5,029
|
|
|
$
|
1,810
|
|
|
$
|
3,219
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||
Contingent value rights
|
|
$
|
(42
|
)
|
|
$
|
(42
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Forward currency contracts
|
|
(42
|
)
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
||||
Interest rate swaps
|
|
(7
|
)
|
|
—
|
|
|
(7
|
)
|
|
—
|
|
||||
Zero-cost collar currency contracts
|
|
(136
|
)
|
|
—
|
|
|
(136
|
)
|
|
—
|
|
||||
Other acquisition related contingent consideration
|
|
(80
|
)
|
|
—
|
|
|
—
|
|
|
(80
|
)
|
||||
Total liabilities
|
|
$
|
(307
|
)
|
|
$
|
(42
|
)
|
|
$
|
(185
|
)
|
|
$
|
(80
|
)
|
|
Year Ended December 31, 2018
|
||
Balance as of December 31, 2017
|
$
|
513
|
|
Cumulative effect adjustment for the adoption of ASU 2018-03 (See Note 1)
|
59
|
|
|
Purchases
|
105
|
|
|
Upward adjustments
|
66
|
|
|
Sales
|
(23
|
)
|
|
Downward adjustments and impairments
|
(134
|
)
|
|
Transfer to readily determinable fair value
|
(41
|
)
|
|
Balance as of December 31, 2018
|
$
|
545
|
|
|
|
Year Ended December 31, 2018
|
||
Liabilities:
|
|
|
||
Balance as of December 31, 2017
|
|
$
|
(80
|
)
|
Amounts acquired from Juno, including measurement period adjustments
|
|
(116
|
)
|
|
Net change in fair value
|
|
(39
|
)
|
|
Settlements, including transfers to Accrued expenses and other current liabilities
|
|
72
|
|
|
Balance as of December 31, 2018
|
|
$
|
(163
|
)
|
|
|
Year Ended December 31, 2017
|
||
Liabilities:
|
|
|
||
Balance as of December 31, 2016
|
|
$
|
(1,490
|
)
|
Net change in fair value
|
|
1,348
|
|
|
Settlements, including transfers to Accrued expenses and other current liabilities
|
|
62
|
|
|
Balance as of December 31, 2017
|
|
$
|
(80
|
)
|
•
|
An impairment charge relating to the entire GED-0301 IPR&D asset of approximately $1,620 million;
|
•
|
Other one-time charges of approximately $188 million that will require cash payments primarily related to wind-down costs associated with discontinuing the Trials and certain development activities; and
|
•
|
A reduction in contingent consideration liabilities of approximately $1,397
million related to GED-0301.
|
|
Notional Amount1
|
||||||
|
2018
|
|
2017
|
||||
Foreign currency zero-cost collar contracts designated as hedging activity:
|
|
|
|
||||
Purchased Put
|
$
|
1,933
|
|
|
$
|
3,319
|
|
Written Call
|
2,216
|
|
|
3,739
|
|
|
|
Notional Amount
|
||||||
|
|
2018
|
|
2017
|
||||
Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes:
|
|
|
|
|
||||
3.875% senior notes due 2025
|
|
$
|
200
|
|
|
$
|
200
|
|
3.450% senior notes due 2027
|
|
450
|
|
|
250
|
|
||
3.900% senior notes due 2028
|
|
200
|
|
|
—
|
|
||
Total
|
|
$
|
850
|
|
|
$
|
450
|
|
|
|
|
|
December 31, 2018
|
||||||
|
|
|
|
Fair Value
|
||||||
Instrument
|
|
Balance Sheet Location
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
|
||||
Foreign exchange contracts1
|
|
Other current assets
|
|
$
|
63
|
|
|
$
|
18
|
|
|
|
Other non-current assets
|
|
45
|
|
|
16
|
|
||
|
|
Other non-current liabilities
|
|
12
|
|
|
15
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
7
|
|
|
—
|
|
||
|
|
Other non-current assets
|
|
1
|
|
|
—
|
|
||
|
|
Other non-current liabilities
|
|
1
|
|
|
19
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
|
|
|||
Foreign exchange contracts1
|
|
Other current assets
|
|
21
|
|
|
5
|
|
||
|
|
Accrued expenses and other current liabilities
|
|
2
|
|
|
12
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
2
|
|
|
3
|
|
||
|
|
Other non-current assets
|
|
5
|
|
|
4
|
|
||
Total
|
|
|
|
$
|
159
|
|
|
$
|
92
|
|
|
|
|
|
December 31, 2017
|
||||||
|
|
|
|
Fair Value
|
||||||
Instrument
|
|
Balance Sheet
Location
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
Foreign exchange contracts1
|
|
Other current assets
|
|
$
|
5
|
|
|
$
|
1
|
|
|
|
Accrued expenses and other current liabilities
|
|
30
|
|
|
79
|
|
||
|
|
Other non-current assets
|
|
1
|
|
|
—
|
|
||
|
|
Other non-current liabilities
|
|
36
|
|
|
159
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
3
|
|
|
—
|
|
||
|
|
Other non-current liabilities
|
|
—
|
|
|
11
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
||||||
Foreign exchange contracts1
|
|
Other current assets
|
|
8
|
|
|
1
|
|
||
|
|
Accrued expenses and other current liabilities
|
|
4
|
|
|
22
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
2
|
|
|
2
|
|
||
|
|
Other non-current assets
|
|
4
|
|
|
3
|
|
||
Total
|
|
|
|
$
|
93
|
|
|
$
|
278
|
|
|
|
|
Carrying Amount of the Hedged Liability
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
|
||||||||||||
Consolidated Balance Sheet Classification in Which the Hedged Item Is Included
|
|
December 31, 2018(1)
|
|
December 31, 2017(1)
|
|
December 31, 2018(2)
|
|
December 31, 2017(2)
|
|||||||||
|
Current portion of long-term debt, net of discount
|
|
$
|
501
|
|
|
$
|
—
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
Long-term debt, net of discount
|
|
8,227
|
|
|
7,270
|
|
|
90
|
|
|
128
|
|
|
|
2018
|
||||||||||||||
Instrument
|
|
Amount of
Gain/(Loss)
Recognized in OCI
on Derivative(1)
|
|
Classification of
Gain/(Loss)
Reclassified from
Accumulated OCI
into Income
|
|
Amount of
Gain/(Loss)
Reclassified from
Accumulated OCI
into Income
|
|
Classification of
Gain/(Loss)
Recognized in
Income Related to Amount Excluded from Effectiveness Testing
|
|
Amount of
Gain/(Loss)
Recognized in
Income on
Derivative Related to Amount Excluded from Effectiveness Testing
|
||||||
Foreign exchange contracts
|
|
$
|
249
|
|
|
Net product sales
|
|
$
|
(2
|
)
|
|
Net product sales
|
|
$
|
(8
|
)
|
Treasury rate lock agreements
|
|
(4
|
)
|
|
Interest (expense)
|
|
(5
|
)
|
|
N/A
|
|
|
|
1
|
Net gains of $35 million are expected to be reclassified from AOCI into income in the next 12 months.
|
|
|
2017
|
||||||||||||||
Instrument
|
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative(1) |
|
Classification of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Classification of
Gain/(Loss) Recognized in Income on Derivative |
|
Amount of
Gain/(Loss) Recognized in Income on Derivative |
||||||
Foreign exchange contracts
|
|
$
|
(419
|
)
|
|
Net product sales
|
|
$
|
184
|
|
|
Net product sales
|
|
$
|
(3
|
)
|
Treasury rate lock agreements
|
|
(2
|
)
|
|
Interest (expense)
|
|
(5
|
)
|
|
N/A
|
|
|
|
|||
Forward starting interest rate swaps
|
|
(13
|
)
|
|
Interest (expense)
|
|
(1
|
)
|
|
N/A
|
|
|
|
1
|
The amounts include a benefit of $32
million and $35 million relating to the amortization of the cumulative amount of fair value hedging adjustments included in the carrying amount of the hedged liability for discontinued hedging relationships for the years ended December
31, 2018 and December 31, 2017, respectively.
|
|
|
Classification of Gain/(Loss)
Recognized in Income
on Derivative
|
|
Classification of Gain/(Loss)
Recognized in Income
on Derivative
|
||||||
Instrument
|
|
2018
|
|
2017
|
||||||
Foreign exchange contracts
|
|
Other income (expense), net
|
|
$
|
16
|
|
|
$
|
(52
|
)
|
|
|
|
|
|
Classification and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
||||||||||
|
|
|
|
|
2018
|
||||||||||
|
|
|
|
|
Net product sales
|
|
Interest (expense)
|
|
Other income (expense), net
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are
recorded
|
|
$
|
15,265
|
|
|
$
|
(741
|
)
|
|
$
|
337
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
The effects of fair value and cash flow hedging:
|
|
|
|
|
|
|
|||||||||
|
Gain (loss) on fair value hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Hedged items
|
|
—
|
|
|
6
|
|
|
—
|
|
|||
|
|
|
Derivatives designated as hedging instruments (1)
|
|
—
|
|
|
29
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Gain (loss) on cash flow hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Foreign exchange contracts:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
20
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Reclassification adjustment for excluded component (loss) gain
|
|
(28
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
Treasury rate lock agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
Classification and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
||||||||||
|
|
|
|
|
2017
|
||||||||||
|
|
|
|
|
Net product sales
|
|
Interest (expense)
|
|
Other income (expense), net
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges are
recorded
|
|
$
|
12,973
|
|
|
$
|
(522
|
)
|
|
$
|
24
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
The effects of fair value and cash flow hedging:
|
|
|
|
|
|
|
|||||||||
|
Gain (loss) on fair value hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Hedged items
|
|
—
|
|
|
2
|
|
|
—
|
|
|||
|
|
|
Derivatives designated as hedging instruments (1)
|
|
—
|
|
|
35
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Gain (loss) on cash flow hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Foreign exchange contracts:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
184
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
15
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Reclassification adjustment for excluded component (loss) gain
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
Treasury rate lock agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
—
|
|
|
(5
|
)
|
|
—
|
|
|||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
December 31, 2018
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gain
|
|
Gross
Unrealized
Loss
|
|
Estimated
Fair
Value
|
||||||||
Ultra short income fund
|
|
$
|
450
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
450
|
|
Time deposits(1) and Repurchase agreements(1)
|
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
||||
Total debt securities available-for-sale
|
|
$
|
496
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
496
|
|
December 31, 2017
|
|
Amortized
Cost
|
|
Gross
Unrealized
Gain
|
|
Gross
Unrealized
Loss
|
|
Estimated
Fair
Value
|
||||||||
U.S. Treasury securities
|
|
$
|
445
|
|
|
$
|
—
|
|
|
$
|
(3
|
)
|
|
$
|
442
|
|
U.S. government-sponsored agency securities
|
|
42
|
|
|
—
|
|
|
—
|
|
|
42
|
|
||||
U.S. government-sponsored agency MBS
|
|
17
|
|
|
—
|
|
|
—
|
|
|
17
|
|
||||
Corporate debt - global
|
|
2,080
|
|
|
—
|
|
|
(5
|
)
|
|
2,075
|
|
||||
Asset backed securities
|
|
203
|
|
|
—
|
|
|
(1
|
)
|
|
202
|
|
||||
Ultra short income fund
|
|
352
|
|
|
—
|
|
|
—
|
|
|
352
|
|
||||
Time deposits(1) and Repurchase agreements (1)
|
|
89
|
|
|
—
|
|
|
—
|
|
|
89
|
|
||||
Total debt securities available-for-sale
|
|
$
|
3,228
|
|
|
$
|
—
|
|
|
$
|
(9
|
)
|
|
$
|
3,219
|
|
|
|
|
|
|
|
|
|
|
||||||||
Equity securities with readily determinable fair values
|
|
$
|
935
|
|
|
$
|
881
|
|
|
$
|
(6
|
)
|
|
$
|
1,810
|
|
|
|
Amortized
Cost
|
|
Fair
Value
|
||||
Duration of one year or less
|
|
$
|
496
|
|
|
$
|
496
|
|
|
|
2018
|
|
2017
|
||||
Raw materials
|
|
$
|
252
|
|
|
$
|
289
|
|
Work in process
|
|
79
|
|
|
89
|
|
||
Finished goods
|
|
127
|
|
|
163
|
|
||
Total
|
|
$
|
458
|
|
|
$
|
541
|
|
|
|
2018
|
|
2017
|
||||
Land
|
|
$
|
81
|
|
|
$
|
77
|
|
Buildings
|
|
639
|
|
|
525
|
|
||
Building and operating equipment
|
|
170
|
|
|
54
|
|
||
Leasehold improvements
|
|
236
|
|
|
153
|
|
||
Machinery and equipment
|
|
426
|
|
|
310
|
|
||
Furniture and fixtures
|
|
79
|
|
|
64
|
|
||
Computer equipment and software
|
|
563
|
|
|
496
|
|
||
Construction in progress
|
|
166
|
|
|
224
|
|
||
Subtotal
|
|
2,360
|
|
|
1,903
|
|
||
Less: accumulated depreciation and amortization
|
|
993
|
|
|
833
|
|
||
Total
|
|
$
|
1,367
|
|
|
$
|
1,070
|
|
|
|
2018
|
|
2017
|
||||
Other receivables
|
|
$
|
113
|
|
|
$
|
80
|
|
Derivative assets
|
|
67
|
|
|
14
|
|
||
Other prepaid taxes
|
|
140
|
|
|
102
|
|
||
Prepaid maintenance and software licenses
|
|
54
|
|
|
42
|
|
||
Other
|
|
127
|
|
|
150
|
|
||
Total
|
|
$
|
501
|
|
|
$
|
388
|
|
|
|
2018
|
|
2017
|
||||
Rebates, distributor chargebacks and distributor services
|
|
$
|
1,107
|
|
|
$
|
814
|
|
Compensation
|
|
391
|
|
|
358
|
|
||
Clinical trial costs and grants
|
|
475
|
|
|
622
|
|
||
Interest
|
|
238
|
|
|
173
|
|
||
Sales, use, value added, and other taxes
|
|
66
|
|
|
59
|
|
||
Milestones payable
|
|
—
|
|
|
62
|
|
||
Success payment liability
|
|
70
|
|
|
—
|
|
||
Short-term contingent consideration and success payments
|
|
60
|
|
|
—
|
|
||
Royalties, license fees and collaboration agreements
|
|
114
|
|
|
52
|
|
||
Other
|
|
466
|
|
|
383
|
|
||
Total
|
|
$
|
2,987
|
|
|
$
|
2,523
|
|
|
|
2018
|
|
2017
|
||||
Contingent consideration (see Note 5)
|
|
$
|
103
|
|
|
$
|
80
|
|
Deferred compensation and long-term incentives
|
|
243
|
|
|
240
|
|
||
Contingent value rights (see Notes 5 and 19)
|
|
19
|
|
|
42
|
|
||
Derivative contracts
|
|
21
|
|
|
134
|
|
||
Other
|
|
91
|
|
|
48
|
|
||
Total
|
|
$
|
477
|
|
|
$
|
544
|
|
December 31, 2018
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Intangible
Assets,
Net
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Acquired developed product rights
|
|
$
|
3,406
|
|
|
$
|
(2,261
|
)
|
|
$
|
1,145
|
|
Technology
|
|
1,743
|
|
|
(552
|
)
|
|
1,191
|
|
|||
Licenses
|
|
66
|
|
|
(35
|
)
|
|
31
|
|
|||
Other
|
|
54
|
|
|
(39
|
)
|
|
15
|
|
|||
|
|
5,269
|
|
|
(2,887
|
)
|
|
2,382
|
|
|||
Non-amortized intangible assets:
|
|
|
|
|
|
|
||||||
Acquired IPR&D product rights
|
|
13,831
|
|
|
—
|
|
|
13,831
|
|
|||
Total intangible assets
|
|
$
|
19,100
|
|
|
$
|
(2,887
|
)
|
|
$
|
16,213
|
|
December 31, 2017
|
|
Gross
Carrying
Value
|
|
Accumulated
Amortization
|
|
Intangible
Assets,
Net
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
||||||
Acquired developed product rights
|
|
$
|
3,406
|
|
|
$
|
(1,939
|
)
|
|
$
|
1,467
|
|
Technology
|
|
483
|
|
|
(410
|
)
|
|
73
|
|
|||
Licenses
|
|
66
|
|
|
(30
|
)
|
|
36
|
|
|||
Other
|
|
43
|
|
|
(34
|
)
|
|
9
|
|
|||
|
|
3,998
|
|
|
(2,413
|
)
|
|
1,585
|
|
|||
Non-amortized intangible assets:
|
|
|
|
|
|
|
||||||
Acquired IPR&D product rights
|
|
6,851
|
|
|
—
|
|
|
6,851
|
|
|||
Total intangible assets
|
|
$
|
10,849
|
|
|
$
|
(2,413
|
)
|
|
$
|
8,436
|
|
|
|
2018
|
|
2017
|
||||
2.250% senior notes due 2019
|
|
$
|
501
|
|
|
$
|
—
|
|
|
2018
|
|
2017
|
||||
2.250% senior notes due 2019
|
$
|
—
|
|
|
$
|
505
|
|
2.875% senior notes due 2020
|
1,497
|
|
|
1,495
|
|
||
3.950% senior notes due 2020
|
509
|
|
|
514
|
|
||
2.250% senior notes due 2021
|
498
|
|
|
497
|
|
||
2.875% senior notes due 2021
|
498
|
|
|
—
|
|
||
3.250% senior notes due 2022
|
1,034
|
|
|
1,044
|
|
||
3.550% senior notes due 2022
|
996
|
|
|
994
|
|
||
2.750% senior notes due 2023
|
747
|
|
|
746
|
|
||
3.250% senior notes due 2023
|
994
|
|
|
—
|
|
||
4.000% senior notes due 2023
|
730
|
|
|
737
|
|
||
3.625% senior notes due 2024
|
1,000
|
|
|
1,001
|
|
||
3.875% senior notes due 2025
|
2,478
|
|
|
2,478
|
|
||
3.450% senior notes due 2027
|
986
|
|
|
991
|
|
||
3.900% senior notes due 2028
|
1,490
|
|
|
—
|
|
||
5.700% senior notes due 2040
|
247
|
|
|
247
|
|
||
5.250% senior notes due 2043
|
393
|
|
|
393
|
|
||
4.625% senior notes due 2044
|
987
|
|
|
987
|
|
||
5.000% senior notes due 2045
|
1,975
|
|
|
1,975
|
|
||
4.350% senior notes due 2047
|
1,234
|
|
|
1,234
|
|
||
4.550% senior notes due 2048
|
1,476
|
|
|
—
|
|
||
Total long-term debt
|
$
|
19,769
|
|
|
$
|
15,838
|
|
|
|
Common Stock
|
|
Common Stock
in Treasury
|
||
Balances as of December 31, 2015
|
|
940.1
|
|
|
(153.5
|
)
|
Exercise of stock options and conversion of restricted stock units
|
|
14.0
|
|
|
(1.0
|
)
|
Issuance of common stock for employee benefit plans
|
|
—
|
|
|
0.4
|
|
Shares repurchased under share repurchase program
|
|
—
|
|
|
(21.4
|
)
|
Balances as of December 31, 2016
|
|
954.1
|
|
|
(175.5
|
)
|
Exercise of stock options and conversion of restricted stock units
|
|
17.6
|
|
|
(0.6
|
)
|
Issuance of common stock for employee benefit plans
|
|
—
|
|
|
0.4
|
|
Shares repurchased under share repurchase program
|
|
—
|
|
|
(36.7
|
)
|
Balances as of December 31, 2017
|
|
971.7
|
|
|
(212.4
|
)
|
Exercise of stock options and conversion of restricted stock units
|
|
9.8
|
|
|
(1.3
|
)
|
Issuance of common stock for employee benefit plans
|
|
—
|
|
|
0.3
|
|
Shares repurchased under share repurchase program
|
|
—
|
|
|
(67.9
|
)
|
Balances as of December 31, 2018
|
|
981.5
|
|
|
(281.3
|
)
|
|
|
Pension
Liability Adjustment
|
|
Net Unrealized
Gains (Losses) On Available-for-Sale
Marketable Securities (1)
|
|
Net Unrealized
Gains (Losses)
Related to Cash Flow Hedges
|
|
Amortization of Excluded Component Related to Cash Flow Hedges
(See Note 1)
|
|
Foreign
Currency
Translation
Adjustments
|
|
Accumulated
Other
Comprehensive
Income (Loss)
|
||||||||||||
Balances as of December 31, 2016
|
|
$
|
(38
|
)
|
|
$
|
144
|
|
|
$
|
415
|
|
|
$
|
—
|
|
|
$
|
(102
|
)
|
|
$
|
419
|
|
Cumulative effect adjustment for the adoption of ASU 2017-12 (See Note 1)
|
|
—
|
|
|
—
|
|
|
(12
|
)
|
|
(18
|
)
|
|
—
|
|
|
(30
|
)
|
||||||
Other comprehensive income (loss) before reclassifications, net of tax
|
|
16
|
|
|
395
|
|
|
(428
|
)
|
|
(15
|
)
|
|
70
|
|
|
38
|
|
||||||
Reclassified losses (gains) from accumulated other comprehensive income (loss), net of tax
|
|
—
|
|
|
23
|
|
|
(181
|
)
|
|
18
|
|
|
—
|
|
|
(140
|
)
|
||||||
Net current-period other comprehensive income (loss), net of tax
|
|
16
|
|
|
418
|
|
|
(609
|
)
|
|
3
|
|
|
70
|
|
|
(102
|
)
|
||||||
Balances as of December 31, 2017
|
|
$
|
(22
|
)
|
|
$
|
562
|
|
|
$
|
(206
|
)
|
|
$
|
(15
|
)
|
|
$
|
(32
|
)
|
|
$
|
287
|
|
Cumulative effect adjustment for the adoption of ASU 2016-01 and ASU 2018-02 (See Note 1)
|
|
—
|
|
|
(566
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(570
|
)
|
||||||
Other comprehensive (loss) income before reclassifications, net of tax
|
|
(6
|
)
|
|
(7
|
)
|
|
246
|
|
|
(20
|
)
|
|
(28
|
)
|
|
185
|
|
||||||
Reclassified losses from accumulated other comprehensive income (loss), net of tax
|
|
—
|
|
|
14
|
|
|
6
|
|
|
28
|
|
|
—
|
|
|
48
|
|
||||||
Net current-period other comprehensive (loss) income, net of tax
|
|
(6
|
)
|
|
7
|
|
|
252
|
|
|
8
|
|
|
(28
|
)
|
|
233
|
|
||||||
Balances as of December 31, 2018
|
|
$
|
(28
|
)
|
|
$
|
3
|
|
|
$
|
42
|
|
|
$
|
(7
|
)
|
|
$
|
(60
|
)
|
|
$
|
(50
|
)
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
Cost of goods sold
|
|
$
|
36
|
|
|
$
|
29
|
|
|
$
|
33
|
|
Research and development
|
|
575
|
|
|
268
|
|
|
253
|
|
|||
Selling, general and administrative
|
|
503
|
|
|
347
|
|
|
320
|
|
|||
Total share-based compensation expense
|
|
1,114
|
|
|
644
|
|
|
606
|
|
|||
Tax benefit related to share-based compensation expense
|
|
151
|
|
|
180
|
|
|
167
|
|
|||
Reduction in net income
|
|
$
|
963
|
|
|
$
|
464
|
|
|
$
|
439
|
|
|
|
2018
|
|
2017
|
|
2016
|
Risk-free interest rate
|
|
2.51% - 2.96%
|
|
1.70% - 2.22%
|
|
1.03% - 2.08%
|
Expected volatility
|
|
29% - 32%
|
|
24% - 30%
|
|
29% - 35%
|
Weighted average expected volatility
|
|
30%
|
|
27%
|
|
32%
|
Expected term (years)
|
|
5.05 - 5.10
|
|
5.03 - 5.06
|
|
5.04 - 5.06
|
Expected dividend yield
|
|
0%
|
|
0%
|
|
0%
|
|
|
Options
(in Millions)
|
|
Weighted
Average Exercise
Price Per Option
|
|
Weighted
Average Remaining
Contractual
Term (Years)
|
|
Aggregate
Intrinsic Value
(in Millions)
|
|||||
Outstanding as of December 31, 2017
|
|
67.8
|
|
|
$
|
82.53
|
|
|
6.1
|
|
$
|
1,823
|
|
Changes during the Year:
|
|
|
|
|
|
|
|
|
|||||
Conversion of Juno awards
|
|
3.7
|
|
|
34.01
|
|
|
|
|
|
|||
Granted
|
|
10.3
|
|
|
89.26
|
|
|
|
|
|
|
||
Exercised
|
|
(6.4
|
)
|
|
38.95
|
|
|
|
|
|
|
||
Forfeited
|
|
(3.1
|
)
|
|
103.83
|
|
|
|
|
|
|
||
Expired
|
|
(1.2
|
)
|
|
106.27
|
|
|
|
|
|
|||
Outstanding as of December 31, 2018
|
|
71.1
|
|
|
$
|
83.57
|
|
|
5.6
|
|
$
|
539
|
|
Vested as of December 31, 2018 or expected to vest in the future
|
|
69.9
|
|
|
$
|
83.28
|
|
|
5.6
|
|
$
|
539
|
|
Vested as of December 31, 2018
|
|
46.1
|
|
|
$
|
74.43
|
|
|
4.3
|
|
$
|
500
|
|
Nonvested RSUs
|
|
Share Equivalent
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested as of December 31, 2017
|
|
7.7
|
|
|
$
|
109.55
|
|
Changes during the period:
|
|
|
|
|
|||
Conversion of Juno awards
|
|
2.5
|
|
|
88.84
|
|
|
Granted
|
|
5.7
|
|
|
79.38
|
|
|
Vested
|
|
(3.2
|
)
|
|
104.09
|
|
|
Forfeited
|
|
(1.0
|
)
|
|
101.47
|
|
|
Nonvested as of December 31, 2018
|
|
11.7
|
|
|
$
|
91.78
|
|
Nonvested Performance-Based RSUs
|
|
Share Equivalent
|
|
Weighted Average Grant Date Fair Value
|
|||
Nonvested as of December 31, 2017
|
|
558
|
|
|
$
|
116.27
|
|
Changes during the period:
|
|
|
|
|
|||
Conversion of Juno awards
|
|
336
|
|
|
89.17
|
|
|
Granted
|
|
163
|
|
|
86.14
|
|
|
Vested
|
|
(315
|
)
|
|
101.80
|
|
|
Forfeited
|
|
(82
|
)
|
|
109.66
|
|
|
Non-vested as of December 31, 2018
|
|
660
|
|
|
$
|
106.98
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
U.S.
|
|
$
|
(600
|
)
|
|
$
|
445
|
|
|
$
|
735
|
|
Non-U.S.
|
|
5,432
|
|
|
3,869
|
|
|
1,637
|
|
|||
Income before income taxes
|
|
$
|
4,832
|
|
|
$
|
4,314
|
|
|
$
|
2,372
|
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States:
|
|
|
|
|
|
|
||||||
Taxes currently payable:
|
|
|
|
|
|
|
||||||
Federal
|
|
$
|
571
|
|
|
$
|
2,545
|
|
|
$
|
569
|
|
State and local
|
|
65
|
|
|
52
|
|
|
43
|
|
|||
Deferred income taxes
|
|
33
|
|
|
(1,331
|
)
|
|
(343
|
)
|
|||
Total U.S. tax provision
|
|
669
|
|
|
1,266
|
|
|
269
|
|
|||
International:
|
|
|
|
|
|
|
||||||
Taxes currently payable
|
|
118
|
|
|
107
|
|
|
106
|
|
|||
Deferred income taxes
|
|
(1
|
)
|
|
1
|
|
|
(2
|
)
|
|||
Total international tax provision
|
|
117
|
|
|
108
|
|
|
104
|
|
|||
Total provision
|
|
$
|
786
|
|
|
$
|
1,374
|
|
|
$
|
373
|
|
|
|
2018
|
|
2017
|
||||||||||||
|
|
Assets
|
|
Liabilities
|
|
Assets
|
|
Liabilities
|
||||||||
NOL carryforwards
|
|
$
|
242
|
|
|
$
|
—
|
|
|
$
|
249
|
|
|
$
|
—
|
|
Tax credit carryforwards
|
|
44
|
|
|
—
|
|
|
11
|
|
|
—
|
|
||||
Share-based compensation
|
|
380
|
|
|
—
|
|
|
317
|
|
|
—
|
|
||||
Other assets and liabilities
|
|
59
|
|
|
(59
|
)
|
|
38
|
|
|
(52
|
)
|
||||
Intangible assets
|
|
425
|
|
|
(3,795
|
)
|
|
333
|
|
|
(2,008
|
)
|
||||
Accrued and other expenses
|
|
316
|
|
|
—
|
|
|
278
|
|
|
—
|
|
||||
Unrealized (gains) on securities
|
|
—
|
|
|
(146
|
)
|
|
—
|
|
|
(193
|
)
|
||||
Subtotal
|
|
1,466
|
|
|
(4,000
|
)
|
|
1,226
|
|
|
(2,253
|
)
|
||||
Valuation allowance
|
|
(195
|
)
|
|
—
|
|
|
(277
|
)
|
|
—
|
|
||||
Total deferred taxes
|
|
$
|
1,271
|
|
|
$
|
(4,000
|
)
|
|
$
|
949
|
|
|
$
|
(2,253
|
)
|
Net deferred tax (liability)
|
|
|
|
$
|
(2,729
|
)
|
|
|
|
$
|
(1,304
|
)
|
|
|
2018
|
|
2017
|
||||
Other non-current assets
|
|
$
|
24
|
|
|
$
|
23
|
|
Deferred income tax liabilities
|
|
(2,753
|
)
|
|
(1,327
|
)
|
||
Net deferred tax (liability)
|
|
$
|
(2,729
|
)
|
|
$
|
(1,304
|
)
|
Percentages
|
|
2018
|
|
2017
|
|
2016
|
|||
U.S. statutory rate
|
|
21.0
|
%
|
|
35.0
|
%
|
|
35.0
|
%
|
Tax rate differences on foreign operations
|
|
(11.2
|
)%
|
|
(28.8
|
)%
|
|
(21.1
|
)%
|
State taxes, net of federal benefit
|
|
1.4
|
%
|
|
0.6
|
%
|
|
0.8
|
%
|
Change in valuation allowance
|
|
0.3
|
%
|
|
0.8
|
%
|
|
0.5
|
%
|
Acquisition and collaboration related differences
|
|
6.0
|
%
|
|
2.1
|
%
|
|
(0.7
|
)%
|
Changes in uncertain tax positions
|
|
(0.1
|
)%
|
|
0.1
|
%
|
|
(0.4
|
)%
|
Stock compensation excess tax benefits
|
|
(0.5
|
)%
|
|
(6.7
|
)%
|
|
—
|
%
|
2017 Tax Act
|
|
(0.9
|
)%
|
|
29.4
|
%
|
|
—
|
%
|
Other
|
|
0.3
|
%
|
|
(0.7
|
)%
|
|
1.6
|
%
|
Effective income tax rate
|
|
16.3
|
%
|
|
31.8
|
%
|
|
15.7
|
%
|
|
|
2018
|
|
2017
|
||||
Balance as of beginning of year
|
|
$
|
896
|
|
|
$
|
414
|
|
Increases related to prior year tax positions
|
|
124
|
|
|
67
|
|
||
Decreases related to prior year tax positions
|
|
(30
|
)
|
|
—
|
|
||
Increases related to current year tax positions
|
|
218
|
|
|
426
|
|
||
Settlements
|
|
—
|
|
|
—
|
|
||
Lapses of statutes of limitations
|
|
(5
|
)
|
|
(11
|
)
|
||
Balance as of end of year
|
|
$
|
1,203
|
|
|
$
|
896
|
|
|
Years Ended December 31,
|
|
As of December 31,1
|
|||||||||||||||||||||||||||
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/ Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
|||||||||||||||
2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
268
|
|
|
13.3
|
%
|
2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
28
|
|
|
—
|
|
|
261
|
|
|
13.6
|
%
|
|||||||
2016
|
—
|
|
|
15
|
|
|
—
|
|
|
—
|
|
|
32
|
|
|
|
|
|
|
|
||||||||||
2015 and prior
|
70
|
|
|
45
|
|
|
—
|
|
|
—
|
|
|
93
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
As of December 31,1
|
|||||||||||||||||||||||||||
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/ Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
|||||||||||||||
2018
|
$
|
—
|
|
|
$
|
15
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
57
|
|
|
$
|
—
|
|
|
$
|
310
|
|
|
11.5
|
%
|
2017
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
31
|
|
|
—
|
|
|
335
|
|
|
12.0
|
%
|
|||||||
2016
|
200
|
|
|
25
|
|
|
—
|
|
|
1
|
|
|
—
|
|
|
|
|
|
|
|
||||||||||
2015 and prior
|
130
|
|
|
—
|
|
|
60
|
|
|
—
|
|
|
89
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
As of December 31,1
|
|||||||||||||||||||||||||||
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/ Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
|||||||||||||||
2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
353
|
|
|
4.2
|
%
|
2017
|
268
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
174
|
|
|
—
|
|
|
246
|
|
|
5.5
|
%
|
|
Years Ended December 31,
|
|
As of December 31,1
|
|||||||||||||||||||||||||||
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/ Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
|||||||||||||||
2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
95
|
|
|
1.9
|
%
|
2017
|
15
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
37
|
|
|
4
|
|
|
171
|
|
|
1.9
|
%
|
|||||||
2016
|
10
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|
50
|
|
|
|
|
|
|
|
||||||||||
2015 and prior
|
75
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
As of December 31,
|
||||||||||||||||||||||||
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
||||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/ Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
||||||||||||
2018
|
$
|
12
|
|
|
$
|
—
|
|
|
$
|
66
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
n/a
|
|
n/a
|
2017
|
246
|
|
|
25
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
n/a
|
|
n/a
|
||||||
2016
|
71
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|||||||
2015 and prior
|
337
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
Years Ended December 31,
|
|
As of December 31,1
|
|||||||||||||||||||||||||||
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/ Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
|||||||||||||||
2018
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
10.7
|
%
|
2017
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10
|
|
|
—
|
|
|
44
|
|
|
10.7
|
%
|
|||||||
2016
|
238
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31,
|
|
As of December 31,
|
|||||||||||||||||||||||||||
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/Termination of Arrangements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
|||||||||||||||
2018
|
$
|
110
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
2.9
|
%
|
|
Years Ended December 31,
|
|
As of December 31,1
|
||||||||||||||||||||||||||
|
Research and Development Expense
|
|
|
|
|
|
|
|
|
||||||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/ Termination of Agreements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
||||||||||||||
2018
|
$
|
402
|
|
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
7
|
|
|
$
|
26
|
|
|
$
|
13
|
|
|
$
|
230
|
|
|
n/a
|
2017
|
229
|
|
|
10
|
|
|
20
|
|
|
4
|
|
|
43
|
|
|
8
|
|
|
749
|
|
|
n/a
|
|||||||
2016
|
297
|
|
|
36
|
|
|
9
|
|
|
17
|
|
|
64
|
|
|
|
|
|
|
|
•
|
2.5% of the net sales of ABRAXANE® and the Abraxis pipeline products that exceed $1.0 billion but are less than or equal to $2.0 billion for such period, plus
|
•
|
an additional amount equal to 5% of the net sales of ABRAXANE® and the Abraxis pipeline products that exceed $2.0 billion but are less than or
equal to $3.0 billion for such period, plus
|
•
|
an additional amount equal to 10% of the net sales of ABRAXANE® and the Abraxis pipeline products that exceed $3.0 billion for such period.
|
|
Operating
Leases
|
||
2019
|
$
|
92
|
|
2020
|
89
|
|
|
2021
|
70
|
|
|
2022
|
59
|
|
|
2023
|
45
|
|
|
Thereafter
|
68
|
|
|
Total minimum lease payments
|
$
|
423
|
|
Revenues
|
|
2018
|
|
2017
|
|
2016
|
||||||
United States
|
|
$
|
10,023
|
|
|
$
|
8,324
|
|
|
$
|
7,010
|
|
Europe
|
|
3,771
|
|
|
3,327
|
|
|
3,046
|
|
|||
All other
|
|
1,487
|
|
|
1,352
|
|
|
1,173
|
|
|||
Total revenues
|
|
$
|
15,281
|
|
|
$
|
13,003
|
|
|
$
|
11,229
|
|
Long-Lived Assets1
|
|
2018
|
|
2017
|
||||
United States
|
|
$
|
1,028
|
|
|
$
|
768
|
|
Europe
|
|
331
|
|
|
296
|
|
||
All other
|
|
8
|
|
|
6
|
|
||
Total long-lived assets
|
|
$
|
1,367
|
|
|
$
|
1,070
|
|
1
|
Long-lived assets consist of Property, plant and equipment, net.
|
|
|
2018
|
|
2017
|
|
2016
|
||||||
REVLIMID®
|
|
$
|
9,685
|
|
|
$
|
8,187
|
|
|
$
|
6,974
|
|
POMALYST®/IMNOVID®
|
|
2,040
|
|
|
1,614
|
|
|
1,311
|
|
|||
OTEZLA®
|
|
1,608
|
|
|
1,279
|
|
|
1,017
|
|
|||
ABRAXANE®
|
|
1,062
|
|
|
992
|
|
|
973
|
|
|||
IDHIFA®
|
|
72
|
|
|
20
|
|
|
—
|
|
|||
VIDAZA®
|
|
594
|
|
|
628
|
|
|
608
|
|
|||
azacitidine for injection
|
|
23
|
|
|
36
|
|
|
66
|
|
|||
THALOMID®
|
|
114
|
|
|
132
|
|
|
152
|
|
|||
ISTODAX®
|
|
63
|
|
|
76
|
|
|
80
|
|
|||
Other
|
|
4
|
|
|
9
|
|
|
4
|
|
|||
Total net product sales
|
|
15,265
|
|
|
12,973
|
|
|
11,185
|
|
|||
Other revenue
|
|
16
|
|
|
30
|
|
|
44
|
|
|||
Total revenue
|
|
$
|
15,281
|
|
|
$
|
13,003
|
|
|
$
|
11,229
|
|
|
|
Percent of Total Revenue
|
|
Percent of Net Accounts Receivable
|
|||||||||||
Customer
|
|
2018
|
|
2017
|
|
2016
|
|
2018
|
|
2017
|
|||||
McKesson Corp.
|
|
12.1
|
%
|
|
12.0
|
%
|
|
10.3
|
%
|
|
10.4
|
%
|
|
9.6
|
%
|
CVS Health Corp.
|
|
11.5
|
%
|
|
12.5
|
%
|
|
12.0
|
%
|
|
9.2
|
%
|
|
9.7
|
%
|
AmerisourceBergen Corp.
|
|
11.4
|
%
|
|
10.0
|
%
|
|
8.5
|
%
|
|
14.4
|
%
|
|
9.7
|
%
|
2018
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
Year
|
||||||||||
Total revenue
|
|
$
|
3,538
|
|
|
$
|
3,814
|
|
|
$
|
3,892
|
|
|
$
|
4,037
|
|
|
$
|
15,281
|
|
Gross profit(1)
|
|
3,396
|
|
|
3,682
|
|
|
3,733
|
|
|
3,867
|
|
|
14,678
|
|
|||||
Income tax provision(2)
|
|
184
|
|
|
262
|
|
|
296
|
|
|
44
|
|
|
786
|
|
|||||
Net income(3)
|
|
846
|
|
|
1,045
|
|
|
1,082
|
|
|
1,073
|
|
|
4,046
|
|
|||||
Net income per share:(4)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.13
|
|
|
$
|
1.46
|
|
|
$
|
1.54
|
|
|
$
|
1.53
|
|
|
$
|
5.65
|
|
Diluted
|
|
$
|
1.10
|
|
|
$
|
1.43
|
|
|
$
|
1.50
|
|
|
$
|
1.50
|
|
|
$
|
5.51
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
748.3
|
|
|
716.1
|
|
|
702.0
|
|
|
699.5
|
|
|
716.3
|
|
|||||
Diluted
|
|
768.3
|
|
|
732.6
|
|
|
719.7
|
|
|
713.9
|
|
|
733.8
|
|
2017
|
|
1Q
|
|
2Q
|
|
3Q
|
|
4Q
|
|
Year
|
||||||||||
Total revenue
|
|
$
|
2,962
|
|
|
$
|
3,271
|
|
|
$
|
3,287
|
|
|
$
|
3,483
|
|
|
$
|
13,003
|
|
Gross profit(1)
|
|
2,839
|
|
|
3,148
|
|
|
3,165
|
|
|
3,360
|
|
|
12,512
|
|
|||||
Income tax provision(2)
|
|
82
|
|
|
77
|
|
|
3
|
|
|
1,212
|
|
|
1,374
|
|
|||||
Net income (loss)
|
|
932
|
|
|
1,101
|
|
|
988
|
|
|
(81
|
)
|
|
2,940
|
|
|||||
Net income (loss) per share:(4)
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.20
|
|
|
$
|
1.41
|
|
|
$
|
1.26
|
|
|
$
|
(0.10
|
)
|
|
$
|
3.77
|
|
Diluted
|
|
$
|
1.15
|
|
|
$
|
1.36
|
|
|
$
|
1.21
|
|
|
$
|
(0.10
|
)
|
|
$
|
3.64
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
779.0
|
|
|
780.4
|
|
|
784.1
|
|
|
773.5
|
|
|
779.2
|
|
|||||
Diluted
|
|
811.2
|
|
|
811.7
|
|
|
815.2
|
|
|
773.5
|
|
|
808.7
|
|
1
|
Gross profit is computed by subtracting cost of goods sold (excluding amortization of acquired intangible assets) from net product sales.
|
2
|
The Income tax provision in the fourth quarter of 2017 includes income tax expense of approximately $1.3 billion as a result of the 2017 Tax Act, which was enacted on December 22, 2017. See Note 17 for additional details related to the 2017 Tax Act.
In addition, the Income tax provision for 2018 and 2017 includes $22 million and $290 million, respectively, of excess tax benefits arising from share-based compensation awards that vested or were exercised during 2018 and 2017,
respectively, as a result of the adoption of ASU 2016-09, “Compensation - Stock Compensation” during 2017.
|
3
|
ASU 2016-01, was effective for us on January 1, 2018. ASU 2016-01 requires changes in the fair value of equity investments with readily
determinable fair values and changes in observable prices of equity investments without readily determinable fair values to be recorded in net income. As such, a net gain of $959
million was recorded in the first quarter of 2018 which was offset by net charges of $6 million, $123 million, and $513 million which were recorded in the second, third and fourth quarters, respectively. See Note 1 of Notes to Consolidated Financial Statements contained
elsewhere in this report for additional information.
|
4
|
The sum of the quarters may not equal the full year due to rounding. In addition, quarterly and full year basic and diluted earnings per
share are calculated separately.
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31,
|
|
Balance at Beginning of Year
|
|
Charged to Expense or Sales
|
|
Deductions
|
|
Balance at
End of Year
|
||||||||
2018:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
16
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
16
|
|
Allowance for customer discounts
|
|
20
|
|
|
243
|
|
1
|
241
|
|
|
22
|
|
||||
Subtotal
|
|
36
|
|
|
245
|
|
|
243
|
|
|
38
|
|
||||
Allowance for sales returns
|
|
15
|
|
|
45
|
|
1
|
13
|
|
|
47
|
|
||||
Total
|
|
$
|
51
|
|
|
$
|
290
|
|
|
$
|
256
|
|
|
$
|
85
|
|
2017:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
15
|
|
|
$
|
(1
|
)
|
|
$
|
(2
|
)
|
|
$
|
16
|
|
Allowance for customer discounts
|
|
16
|
|
|
193
|
|
1
|
189
|
|
|
20
|
|
||||
Subtotal
|
|
31
|
|
|
192
|
|
|
187
|
|
|
36
|
|
||||
Allowance for sales returns
|
|
18
|
|
|
8
|
|
1
|
11
|
|
|
15
|
|
||||
Total
|
|
$
|
49
|
|
|
$
|
200
|
|
|
$
|
198
|
|
|
$
|
51
|
|
2016:
|
|
|
|
|
|
|
|
|
||||||||
Allowance for doubtful accounts
|
|
$
|
18
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
15
|
|
Allowance for customer discounts
|
|
12
|
|
|
154
|
|
1
|
150
|
|
|
16
|
|
||||
Subtotal
|
|
30
|
|
|
155
|
|
|
154
|
|
|
31
|
|
||||
Allowance for sales returns
|
|
17
|
|
|
11
|
|
1
|
10
|
|
|
18
|
|
||||
Total
|
|
$
|
47
|
|
|
$
|
166
|
|
|
$
|
164
|
|
|
$
|
49
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
|
||||||||
Net product sales
|
|
$
|
4,518
|
|
|
$
|
3,890
|
|
|
$
|
12,941
|
|
|
$
|
11,229
|
|
Other revenue
|
|
2
|
|
|
2
|
|
|
4
|
|
|
15
|
|
||||
Total revenue
|
|
4,520
|
|
|
3,892
|
|
|
12,945
|
|
|
11,244
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of goods sold (excluding amortization of acquired intangible assets)
|
|
167
|
|
|
157
|
|
|
458
|
|
|
418
|
|
||||
Research and development
|
|
1,167
|
|
|
1,081
|
|
|
3,483
|
|
|
4,535
|
|
||||
Selling, general and administrative
|
|
781
|
|
|
746
|
|
|
2,347
|
|
|
2,400
|
|
||||
Amortization of acquired intangible assets
|
|
109
|
|
|
127
|
|
|
327
|
|
|
341
|
|
||||
Acquisition/integration related charges and restructuring, net
|
|
32
|
|
|
101
|
|
|
245
|
|
|
166
|
|
||||
Total costs and expenses
|
|
2,256
|
|
|
2,212
|
|
|
6,860
|
|
|
7,860
|
|
||||
Operating income
|
|
2,264
|
|
|
1,680
|
|
|
6,085
|
|
|
3,384
|
|
||||
Other income and (expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Interest and investment income, net
|
|
45
|
|
|
8
|
|
|
117
|
|
|
30
|
|
||||
Interest (expense)
|
|
(190
|
)
|
|
(193
|
)
|
|
(574
|
)
|
|
(551
|
)
|
||||
Other (expense) income, net
|
|
(202
|
)
|
|
(117
|
)
|
|
(76
|
)
|
|
852
|
|
||||
Income before income taxes
|
|
1,917
|
|
|
1,378
|
|
|
5,552
|
|
|
3,715
|
|
||||
Income tax provision
|
|
226
|
|
|
296
|
|
|
745
|
|
|
742
|
|
||||
Net income
|
|
$
|
1,691
|
|
|
$
|
1,082
|
|
|
$
|
4,807
|
|
|
$
|
2,973
|
|
Net income per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
$
|
2.38
|
|
|
$
|
1.54
|
|
|
$
|
6.81
|
|
|
$
|
4.12
|
|
Diluted
|
|
$
|
2.32
|
|
|
$
|
1.50
|
|
|
$
|
6.63
|
|
|
$
|
4.02
|
|
Weighted average shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Basic
|
|
709.4
|
|
|
702.0
|
|
|
706.2
|
|
|
722.0
|
|
||||
Diluted
|
|
729.5
|
|
|
719.7
|
|
|
725.5
|
|
|
740.4
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
|
$
|
1,691
|
|
|
$
|
1,082
|
|
|
$
|
4,807
|
|
|
$
|
2,973
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
|
(33
|
)
|
|
(2
|
)
|
|
(34
|
)
|
|
(14
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains related to cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains
|
|
80
|
|
|
54
|
|
|
119
|
|
|
181
|
|
||||
Tax benefit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
||||
Unrealized holding gains, net of tax
|
|
80
|
|
|
54
|
|
|
119
|
|
|
182
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment for (gains) losses included in net income
|
|
(18
|
)
|
|
(13
|
)
|
|
(62
|
)
|
|
27
|
|
||||
Tax (benefit)
|
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
(1
|
)
|
||||
Reclassification adjustment for (gains) losses included in net income, net of tax
|
|
(19
|
)
|
|
(13
|
)
|
|
(63
|
)
|
|
26
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Excluded component related to cash flow hedges:
|
|
|
|
|
|
|
|
|
||||||||
Amortization of excluded component (gains)
|
|
(1
|
)
|
|
(3
|
)
|
|
(4
|
)
|
|
(18
|
)
|
||||
Reclassification of realized excluded component losses to net income
|
|
2
|
|
|
6
|
|
|
5
|
|
|
23
|
|
||||
Net reclassification adjustment included in net income
|
|
1
|
|
|
3
|
|
|
1
|
|
|
5
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Net unrealized gains (losses) on debt securities available-for-sale:
|
|
|
|
|
|
|
|
|
||||||||
Unrealized holding gains (losses)
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(9
|
)
|
||||
Tax benefit
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
||||
Unrealized holding gains (losses), net of tax
|
|
—
|
|
|
—
|
|
|
1
|
|
|
(7
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Reclassification adjustment for (gains) losses included in net income
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
18
|
|
||||
Tax (benefit)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
||||
Reclassification adjustment for (gains) losses included in net income, net of tax
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
14
|
|
||||
Total other comprehensive income
|
|
29
|
|
|
42
|
|
|
23
|
|
|
206
|
|
||||
Comprehensive income
|
|
$
|
1,720
|
|
|
$
|
1,124
|
|
|
$
|
4,830
|
|
|
$
|
3,179
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
September 30,
2019 |
|
December 31,
2018 |
||||
Assets
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
||
Cash and cash equivalents
|
$
|
9,604
|
|
|
$
|
4,234
|
|
Debt securities available-for-sale
|
14
|
|
|
496
|
|
||
Equity investments with readily determinable fair values
|
1,279
|
|
|
1,312
|
|
||
Accounts receivable, net of allowances of $52 and $38 as of September 30, 2019 and December 31, 2018, respectively
|
2,374
|
|
|
2,066
|
|
||
Inventory
|
451
|
|
|
458
|
|
||
Other current assets
|
732
|
|
|
501
|
|
||
Total current assets
|
14,454
|
|
|
9,067
|
|
||
Property, plant and equipment, net
|
1,415
|
|
|
1,367
|
|
||
Intangible assets, net
|
16,387
|
|
|
16,213
|
|
||
Goodwill
|
8,003
|
|
|
8,003
|
|
||
Other non-current assets
|
1,104
|
|
|
830
|
|
||
Total assets
|
$
|
41,363
|
|
|
$
|
35,480
|
|
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
||
Short-term borrowings and current portion of long-term debt
|
$
|
1,498
|
|
|
$
|
501
|
|
Accounts payable
|
421
|
|
|
418
|
|
||
Accrued expenses and other current liabilities
|
2,964
|
|
|
2,987
|
|
||
Income taxes payable
|
82
|
|
|
78
|
|
||
Current portion of deferred revenue
|
44
|
|
|
73
|
|
||
Total current liabilities
|
5,009
|
|
|
4,057
|
|
||
Deferred revenue, net of current portion
|
16
|
|
|
73
|
|
||
Income taxes payable
|
2,454
|
|
|
2,190
|
|
||
Deferred income tax liabilities
|
2,854
|
|
|
2,753
|
|
||
Other non-current liabilities
|
654
|
|
|
477
|
|
||
Long-term debt, net of discount
|
18,289
|
|
|
19,769
|
|
||
Total liabilities
|
29,276
|
|
|
29,319
|
|
||
Commitments and Contingencies (See Note 15)
|
|
|
|
|
|
||
Stockholders’ Equity
|
|
|
|
|
|
||
Preferred stock, $.01 par value per share, 5.0 million shares authorized; none outstanding as of September 30, 2019 and December 31, 2018
|
—
|
|
|
—
|
|
||
Common stock, $.01 par value per share, 1,150.0 million shares authorized; issued 992.6 million and 981.5 million shares as of September 30, 2019 and December 31, 2018, respectively
|
10
|
|
|
10
|
|
||
Common stock in treasury, at cost; 281.2 million and 281.3 million shares as of September 30, 2019 and December 31, 2018, respectively
|
(26,334
|
)
|
|
(26,336
|
)
|
||
Additional paid-in capital
|
16,072
|
|
|
14,978
|
|
||
Retained earnings
|
22,366
|
|
|
17,559
|
|
||
Accumulated other comprehensive (loss)
|
(27
|
)
|
|
(50
|
)
|
||
Total stockholders’ equity
|
12,087
|
|
|
6,161
|
|
||
Total liabilities and stockholders’ equity
|
$
|
41,363
|
|
|
$
|
35,480
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
Nine-Month Periods Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
||
Net income
|
$
|
4,807
|
|
|
$
|
2,973
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||
Depreciation
|
142
|
|
|
119
|
|
||
Amortization
|
344
|
|
|
346
|
|
||
Impairment charges
|
—
|
|
|
30
|
|
||
Deferred income taxes
|
(20
|
)
|
|
(10
|
)
|
||
Change in value of contingent consideration and success payments
|
(18
|
)
|
|
74
|
|
||
Net loss on sales of debt securities available-for-sale
|
—
|
|
|
18
|
|
||
Fair value adjustments on equity investments
|
100
|
|
|
(830
|
)
|
||
Share-based compensation expense
|
658
|
|
|
731
|
|
||
Share-based employee benefit plan expense
|
—
|
|
|
33
|
|
||
Derivative instruments
|
31
|
|
|
(11
|
)
|
||
Other, net
|
(74
|
)
|
|
(14
|
)
|
||
Change in current assets and liabilities, excluding the effect of acquisitions and disposals:
|
|
|
|
|
|
||
Accounts receivable
|
(331
|
)
|
|
(225
|
)
|
||
Inventory
|
7
|
|
|
31
|
|
||
Other operating assets
|
(100
|
)
|
|
(374
|
)
|
||
Accounts payable and other operating liabilities
|
84
|
|
|
(66
|
)
|
||
Income tax payable
|
265
|
|
|
(22
|
)
|
||
Payment of contingent consideration
|
(29
|
)
|
|
(22
|
)
|
||
Deferred revenue
|
(51
|
)
|
|
47
|
|
||
Net cash provided by operating activities
|
5,815
|
|
|
2,828
|
|
||
Cash flows from investing activities:
|
|
|
|
|
|
||
Proceeds from sales of debt securities available-for-sale
|
976
|
|
|
3,383
|
|
||
Purchases of debt securities available-for-sale
|
(493
|
)
|
|
(240
|
)
|
||
Capital expenditures
|
(197
|
)
|
|
(232
|
)
|
||
Proceeds from sales of equity investment securities
|
20
|
|
|
96
|
|
||
Purchases of equity investment securities
|
(107
|
)
|
|
(176
|
)
|
||
Payments for acquisition of business, net of cash acquired
|
—
|
|
|
(8,648
|
)
|
||
Payment for acquisition of intangible asset
|
(400
|
)
|
|
—
|
|
||
Net cash (used in) investing activities
|
(201
|
)
|
|
(5,817
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
|
||
Payment for treasury shares
|
—
|
|
|
(6,096
|
)
|
||
Proceeds from short-term borrowing
|
—
|
|
|
5,709
|
|
||
Principal repayments on short-term borrowing
|
—
|
|
|
(5,710
|
)
|
||
Proceeds from issuance of long-term debt
|
—
|
|
|
4,452
|
|
||
Principal repayments on current portion of long-term debt
|
(500
|
)
|
|
—
|
|
||
Payment of contingent consideration
|
(82
|
)
|
|
(40
|
)
|
||
Net proceeds from share-based compensation arrangements
|
363
|
|
|
129
|
|
||
Net cash (used in) financing activities
|
(219
|
)
|
|
(1,556
|
)
|
||
Effect of currency rate changes on cash and cash equivalents
|
(25
|
)
|
|
12
|
|
||
Net increase (decrease) in cash and cash equivalents
|
5,370
|
|
|
(4,533
|
)
|
||
Cash and cash equivalents at beginning of period
|
4,234
|
|
|
7,013
|
|
||
Cash and cash equivalents at end of period
|
$
|
9,604
|
|
|
$
|
2,480
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
Nine-Month Periods Ended September 30,
|
||||||
|
2019
|
|
2018
|
||||
Supplemental schedule of non-cash investing and financing activity:
|
|
|
|
|
|
||
Change in net unrealized (gain) loss on debt securities available-for-sale
|
$
|
(1
|
)
|
|
$
|
9
|
|
Increase in acquired intangible asset relating to deferred taxes
|
119
|
|
|
—
|
|
||
Supplemental disclosure of cash flow information:
|
|
|
|
|
|
||
Interest paid
|
671
|
|
|
581
|
|
||
Income taxes paid
|
503
|
|
|
974
|
|
|
||
|
|
|
Asset/Liability
|
Operating Leases
|
Finance Leases(1)
|
Right of use (ROU) assets
|
Other non-current assets
|
Property, plant and equipment, net
|
Current lease liabilities
|
Accrued expenses and other current liabilities
|
Short-term borrowings and current portion of long-term debt
|
Non-current lease liabilities
|
Other non-current liabilities
|
Long-term debt, net of discount
|
|
|
•
|
ASU 2014-09 “Revenue from Contracts with Customers” (ASU 2014-09);
|
|
|
•
|
ASU 2016-01 “Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities” (ASU 2016-01);
|
|
|
•
|
ASU 2018-03 “Technical Corrections and Improvements to Financial Instruments-Overall: Recognition and Measurement of Financial Assets
and Financial Liabilities” (ASU 2018-03);
|
|
|
•
|
ASU 2018-02 “Income Statement-Reporting Comprehensive Income: Reclassification of Certain Tax Effects from Accumulated Other
Comprehensive Income” (ASU 2018-02); and
|
|
|
•
|
ASU 2016-16 “Intra-Entity Transfers of Assets Other Than Inventory” (ASU 2016-16).
|
|
|||||||
|
|
|
|
|
|
|
|
|
Retained Earnings
Increase / (Decrease)
|
|
AOCI
(Decrease) / Increase
|
||||
ASU 2014-09
|
$
|
4
|
|
|
$
|
—
|
|
ASU 2016-01
|
687
|
|
|
(687
|
)
|
||
ASU 2018-03
|
44
|
|
|
—
|
|
||
ASU 2018-02
|
(117
|
)
|
|
117
|
|
||
ASU 2016-16
|
(166
|
)
|
|
—
|
|
||
Net cumulative effect adjustments to Retained earnings and AOCI on January 1, 2018 due to the adoption of new accounting standards
|
$
|
452
|
|
|
$
|
(570
|
)
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Gross Product Sales
|
|
$
|
5,476
|
|
|
$
|
4,654
|
|
|
$
|
15,812
|
|
|
$
|
13,431
|
|
Gross-to-Net Adjustments:
|
|
|
|
|
|
|
|
|
||||||||
Government Rebates
|
|
(329
|
)
|
|
(249
|
)
|
|
(1,015
|
)
|
|
(809
|
)
|
||||
Chargebacks and Distributor Services Fees
|
|
(552
|
)
|
|
(449
|
)
|
|
(1,611
|
)
|
|
(1,206
|
)
|
||||
Sales Discounts
|
|
(87
|
)
|
|
(62
|
)
|
|
(236
|
)
|
|
(177
|
)
|
||||
Sales Returns and Allowances
|
|
10
|
|
|
(4
|
)
|
|
(9
|
)
|
|
(10
|
)
|
||||
Total Gross-to-Net Adjustments
|
|
(958
|
)
|
|
(764
|
)
|
|
(2,871
|
)
|
|
(2,202
|
)
|
||||
Net Product Sales
|
|
$
|
4,518
|
|
|
$
|
3,890
|
|
|
$
|
12,941
|
|
|
$
|
11,229
|
|
|
|||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Hematology / Oncology:
|
|
|
|
|
|
|
|
|
|
||||||||
REVLIMID®
|
|
|
|
|
|
|
|
|
|
||||||||
|
U.S.
|
|
$
|
1,902
|
|
|
$
|
1,667
|
|
|
$
|
5,398
|
|
|
$
|
4,740
|
|
|
International
|
|
868
|
|
|
782
|
|
|
2,681
|
|
|
2,396
|
|
||||
|
Worldwide
|
|
2,770
|
|
|
2,449
|
|
|
8,079
|
|
|
7,136
|
|
||||
POMALYST®/IMNOVID®
|
|
|
|
|
|
|
|
|
|
||||||||
|
U.S.
|
|
469
|
|
|
357
|
|
|
1,306
|
|
|
998
|
|
||||
|
International
|
|
195
|
|
|
156
|
|
|
534
|
|
|
475
|
|
||||
|
Worldwide
|
|
664
|
|
|
513
|
|
|
1,840
|
|
|
1,473
|
|
||||
ABRAXANE®
|
|
|
|
|
|
|
|
|
|
||||||||
|
U.S.
|
|
206
|
|
|
174
|
|
|
609
|
|
|
485
|
|
||||
|
International
|
|
112
|
|
|
114
|
|
|
311
|
|
|
308
|
|
||||
|
Worldwide
|
|
318
|
|
|
288
|
|
|
920
|
|
|
793
|
|
||||
VIDAZA®
|
|
|
|
|
|
|
|
|
|
||||||||
|
U.S.
|
|
2
|
|
|
2
|
|
|
7
|
|
|
7
|
|
||||
|
International
|
|
146
|
|
|
137
|
|
|
456
|
|
|
451
|
|
||||
|
Worldwide
|
|
148
|
|
|
139
|
|
|
463
|
|
|
458
|
|
||||
All Other
|
|
|
|
|
|
|
|
|
|
||||||||
|
U.S.
|
|
55
|
|
|
52
|
|
|
155
|
|
|
159
|
|
||||
|
International
|
|
16
|
|
|
17
|
|
|
55
|
|
|
50
|
|
||||
|
Worldwide
|
|
71
|
|
|
69
|
|
|
210
|
|
|
209
|
|
||||
Total Hematology / Oncology:
|
|
|
|
|
|
|
|
|
|
||||||||
|
U.S.
|
|
2,634
|
|
|
2,252
|
|
|
7,475
|
|
|
6,389
|
|
||||
|
International
|
|
1,337
|
|
|
1,206
|
|
|
4,037
|
|
|
3,680
|
|
||||
|
Worldwide
|
|
3,971
|
|
|
3,458
|
|
|
11,512
|
|
|
10,069
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Inflammation & Immunology:
|
|
|
|
|
|
|
|
|
|
||||||||
OTEZLA®
|
|
|
|
|
|
|
|
|
|
||||||||
|
U.S.
|
|
445
|
|
|
348
|
|
|
1,145
|
|
|
915
|
|
||||
|
International
|
|
102
|
|
|
84
|
|
|
284
|
|
|
245
|
|
||||
|
Worldwide
|
|
547
|
|
|
432
|
|
|
1,429
|
|
|
1,160
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total net product sales
|
|
|
|
|
|
|
|
|
|
||||||||
|
U.S.
|
|
3,079
|
|
|
2,600
|
|
|
8,620
|
|
|
7,304
|
|
||||
|
International
|
|
1,439
|
|
|
1,290
|
|
|
4,321
|
|
|
3,925
|
|
||||
|
Worldwide
|
|
4,518
|
|
|
3,890
|
|
|
12,941
|
|
|
11,229
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Other revenue
|
|
|
2
|
|
|
2
|
|
|
4
|
|
|
15
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||||
Total revenue
|
|
|
$
|
4,520
|
|
|
$
|
3,892
|
|
|
$
|
12,945
|
|
|
$
|
11,244
|
|
|
|||
|
|
|
|
|
Total Consideration
|
||
Cash paid for outstanding common stock at $87.00 per share
|
$
|
9,101
|
|
Celgene investment in Juno at $87.00 per share (1)
|
966
|
|
|
Cash for equity compensation attributable to pre-combination service (2)
|
367
|
|
|
Total consideration
|
$
|
10,434
|
|
|
|
|
|
|
Amounts recognized as of the acquisition date of March 6, 2018
|
||
Working capital (1)
|
$
|
452
|
|
IPR&D
|
6,980
|
|
|
Technology platform intangible asset
|
1,260
|
|
|
Property, plant and equipment, net
|
144
|
|
|
Other non-current assets
|
32
|
|
|
Deferred tax liabilities, net
|
(1,530
|
)
|
|
Other non-current liabilities
|
(41
|
)
|
|
Total identifiable net assets
|
7,297
|
|
|
Goodwill
|
3,137
|
|
|
Total net assets acquired
|
$
|
10,434
|
|
|
||||
|
|
|
|
|
|
|
Nine-Month Period Ended September 30, 2018
|
||
Total revenue
|
|
$
|
11,254
|
|
Net income
|
|
2,947
|
|
|
|
|
|
||
Net income per common share: basic
|
|
$
|
4.08
|
|
Net income per common share: diluted
|
|
$
|
3.98
|
|
|
|
•
|
Elimination of research related cost sharing transactions between Celgene and Juno;
|
|
|
•
|
The pro forma financial information assumes that the acquisition related transaction fees and costs, including post combination
share-based compensation related to the acquisition, were removed from the nine-month period ended September 30, 2018 and were assumed to have been incurred during the first quarter of 2017;
|
|
|
•
|
The pro forma financial information assumes that the gain recognized as a result of remeasuring to fair value the equity interest we
held in Juno prior to the business combination was removed from the nine-month period ended September 30, 2018 and was assumed to have been recognized during the first quarter of 2017;
|
|
|
•
|
Additional interest expense and amortization of debt issuance costs for a portion of the $4.5 billion of debt that was issued in February 2018 to partially finance the acquisition;
|
|
|
•
|
Additional amortization expense on the acquired technology platform asset; and
|
|
|
•
|
Statutory tax rates were applied, as appropriate, to each pro forma adjustment based on the jurisdiction in which the adjustment
occurred.
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
(Amounts in millions, except per share)
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Net income
|
$
|
1,691
|
|
|
$
|
1,082
|
|
|
$
|
4,807
|
|
|
$
|
2,973
|
|
Weighted-average shares:
|
|
|
|
|
|
|
|
||||||||
Basic
|
709.4
|
|
|
702.0
|
|
|
706.2
|
|
|
722.0
|
|
||||
Effect of dilutive securities:
|
|
|
|
|
|
|
|
||||||||
Options, restricted stock units, performance stock units and other
|
20.1
|
|
|
17.7
|
|
|
19.3
|
|
|
18.4
|
|
||||
Diluted
|
729.5
|
|
|
719.7
|
|
|
725.5
|
|
|
740.4
|
|
||||
Net income per share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
2.38
|
|
|
$
|
1.54
|
|
|
$
|
6.81
|
|
|
$
|
4.12
|
|
Diluted
|
$
|
2.32
|
|
|
$
|
1.50
|
|
|
$
|
6.63
|
|
|
$
|
4.02
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
Liability
Adjustment
|
|
Net Unrealized
Gains (Losses) On
Debt Securities Available-for-Sale(1)
|
|
Net Unrealized
Gains (Losses)
Related to Cash Flow Hedges
|
|
Amortization of Excluded Component Related to Cash Flow Hedges
|
|
Foreign
Currency
Translation
Adjustments
|
|
Accumulated
Other
Comprehensive
(Loss) Income
|
||||||||||||
Balance as of December 31, 2018
|
$
|
(28
|
)
|
|
$
|
3
|
|
|
$
|
42
|
|
|
$
|
(7
|
)
|
|
$
|
(60
|
)
|
|
$
|
(50
|
)
|
Other comprehensive income (loss) before reclassifications, net of tax
|
—
|
|
|
1
|
|
|
119
|
|
|
(4
|
)
|
|
(34
|
)
|
|
82
|
|
||||||
Reclassified (gains) losses from accumulated other comprehensive income (loss), net of tax
|
—
|
|
|
(1
|
)
|
|
(63
|
)
|
|
5
|
|
|
—
|
|
|
(59
|
)
|
||||||
Net current-period other comprehensive income (loss), net of tax
|
—
|
|
|
—
|
|
|
56
|
|
|
1
|
|
|
(34
|
)
|
|
23
|
|
||||||
Balance as of September 30, 2019
|
$
|
(28
|
)
|
|
$
|
3
|
|
|
$
|
98
|
|
|
$
|
(6
|
)
|
|
$
|
(94
|
)
|
|
$
|
(27
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Balance as of December 31, 2017
|
$
|
(22
|
)
|
|
$
|
562
|
|
|
$
|
(206
|
)
|
|
$
|
(15
|
)
|
|
$
|
(32
|
)
|
|
$
|
287
|
|
Cumulative effect adjustment for the adoption of ASU 2016-01 and ASU 2018-02
|
—
|
|
|
(566
|
)
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
(570
|
)
|
||||||
Other comprehensive (loss) income before reclassifications, net of tax
|
—
|
|
|
(7
|
)
|
|
182
|
|
|
(18
|
)
|
|
(14
|
)
|
|
143
|
|
||||||
Reclassified losses from accumulated other comprehensive income, net of tax
|
—
|
|
|
14
|
|
|
26
|
|
|
23
|
|
|
—
|
|
|
63
|
|
||||||
Net current-period other comprehensive income (loss), net of tax
|
—
|
|
|
7
|
|
|
208
|
|
|
5
|
|
|
(14
|
)
|
|
206
|
|
||||||
Balance as of September 30, 2018
|
$
|
(22
|
)
|
|
$
|
3
|
|
|
$
|
(2
|
)
|
|
$
|
(10
|
)
|
|
$
|
(46
|
)
|
|
$
|
(77
|
)
|
|
|
•
|
Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Our level 1 assets consist of
equity investments with readily determinable fair values. Our level 1 liability relates to our publicly traded Abraxis contingent value rights (Abraxis CVRs). See Note 19 of Notes to Consolidated Financial Statements included in our 2018 Annual Report on Form 10-K for a description of the Abraxis CVRs.
|
|
|
•
|
Level 2 inputs utilize observable quoted prices for similar assets and liabilities in active markets and observable quoted prices for
identical or similar assets in markets that are not very active. From time to time, our level 2 assets consist primarily of U.S. Treasury securities, U.S. government-sponsored agency securities, U.S. government-sponsored agency
mortgage-backed securities (MBS), global corporate debt securities, asset backed securities, ultra short income fund investments, time deposits and repurchase agreements with original maturities of greater than three months. We may also
have derivative instruments including foreign currency forward contracts, purchased currency options, zero-cost collar currency contracts and interest rate swap contracts, which may be in an asset or liability position.
|
|
|
•
|
Level 3 inputs utilize unobservable inputs and include valuations of assets or liabilities for which there is little, if any, market
activity. We do not have any level 3 assets. Our level 3 liabilities consist of contingent consideration related to undeveloped product rights and technology platforms resulting from the acquisitions of Gloucester Pharmaceuticals, Inc.
(Gloucester), Nogra Pharma Limited (Nogra), Avila Therapeutics, Inc. (Avila) and Quanticel Pharmaceuticals, Inc. (Quanticel). In addition, in connection with the Juno Acquisition, we assumed Juno’s contingent consideration and success
payment liabilities.
|
|
|
|
Inputs
|
Ranges (weighted average) utilized as of:
|
|
September 30, 2019
|
December 31, 2018
|
|
Discount rate
|
3.6% to 4.8% (4.2%)
|
3.6% to 4.8% (4.3%)
|
Probability of payment
|
0% to 68% (4%)
|
0% to 68% (5%)
|
Projected year of payment for development and regulatory milestones
|
2020 to 2029 (2024)
|
2020 to 2029 (2024)
|
Projected year of payment for sales-based milestones and other amounts calculated as a percentage of annual sales
|
N/A
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements
as of September 30, 2019
|
||||||||||||
|
Balance as of
September 30, 2019
|
|
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Debt securities available-for-sale
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
$
|
—
|
|
Equity investments with readily determinable fair values
|
1,279
|
|
|
1,279
|
|
|
—
|
|
|
—
|
|
||||
Forward currency contracts
|
106
|
|
|
—
|
|
|
106
|
|
|
—
|
|
||||
Zero-cost collar currency contracts
|
15
|
|
|
—
|
|
|
15
|
|
|
—
|
|
||||
Total assets
|
$
|
1,414
|
|
|
$
|
1,279
|
|
|
$
|
135
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent value rights
|
$
|
(25
|
)
|
|
$
|
(25
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Other acquisition related contingent consideration
|
(98
|
)
|
|
—
|
|
|
—
|
|
|
(98
|
)
|
||||
Total liabilities
|
$
|
(123
|
)
|
|
$
|
(25
|
)
|
|
$
|
—
|
|
|
$
|
(98
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value Measurements
as of December 31, 2018
|
||||||||||||
|
Balance as of December 31, 2018
|
|
Quoted Price in
Active Markets for
Identical Assets
(Level 1)
|
|
Significant
Other Observable
Inputs
(Level 2)
|
|
Significant
Unobservable
Inputs
(Level 3)
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Debt securities available-for-sale
|
$
|
496
|
|
|
$
|
—
|
|
|
$
|
496
|
|
|
$
|
—
|
|
Equity investments with readily determinable fair values
|
1,312
|
|
|
1,312
|
|
|
—
|
|
|
—
|
|
||||
Forward currency contracts
|
78
|
|
|
—
|
|
|
78
|
|
|
—
|
|
||||
Total assets
|
$
|
1,886
|
|
|
$
|
1,312
|
|
|
$
|
574
|
|
|
$
|
—
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
||||
Contingent value rights
|
$
|
(19
|
)
|
|
$
|
(19
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest rate swaps
|
(10
|
)
|
|
—
|
|
|
(10
|
)
|
|
—
|
|
||||
Zero-cost collar currency contracts
|
(1
|
)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
||||
Other acquisition related contingent consideration and success payments
|
(163
|
)
|
|
—
|
|
|
—
|
|
|
(163
|
)
|
||||
Total liabilities
|
$
|
(193
|
)
|
|
$
|
(19
|
)
|
|
$
|
(11
|
)
|
|
$
|
(163
|
)
|
|
|
|
|
|
Nine-Month Period Ended September 30, 2019
|
||
Balance as of December 31, 2018
|
$
|
545
|
|
Purchases
|
58
|
|
|
Upward adjustments
|
35
|
|
|
Sales
|
(15
|
)
|
|
Downward adjustments and impairments
|
(52
|
)
|
|
Transfer to readily determinable fair value
|
(18
|
)
|
|
Balance as of September 30, 2019
|
$
|
553
|
|
|
|||
|
|
|
|
|
Nine-Month Period Ended September 30, 2018
|
||
Balance as of December 31, 2017
|
$
|
513
|
|
Cumulative effect adjustment for the adoption of ASU 2018-03
|
59
|
|
|
Purchases
|
55
|
|
|
Upward adjustments
|
41
|
|
|
Sales
|
(23
|
)
|
|
Downward adjustments and impairments
|
(117
|
)
|
|
Transfer to readily determinable fair value
|
(41
|
)
|
|
Balance as of September 30, 2018
|
$
|
487
|
|
|
||||
|
|
|
|
|
|
|
Three-Month Period Ended September 30, 2019
|
||
Liabilities:
|
|
|
||
Balance as of June 30, 2019
|
|
$
|
(98
|
)
|
Net change in fair value
|
|
—
|
|
|
Settlements, including transfers to Accrued expenses and other current liabilities
|
|
—
|
|
|
Balance as of September 30, 2019
|
|
$
|
(98
|
)
|
|
||||
|
|
|
|
|
|
|
Three-Month Period Ended September 30, 2018
|
||
Liabilities:
|
|
|
||
Balance as of June 30, 2018
|
|
$
|
(193
|
)
|
Net change in fair value
|
|
(46
|
)
|
|
Settlements, including transfers to Accrued expenses and other current liabilities
|
|
70
|
|
|
Balance as of September 30, 2018
|
|
$
|
(169
|
)
|
|
||||
|
|
|
|
|
|
|
Nine-Month Period Ended September 30, 2019
|
||
Liabilities:
|
|
|
||
Balance as of December 31, 2018
|
|
$
|
(163
|
)
|
Net change in fair value
|
|
25
|
|
|
Settlements, including transfers to Accrued expenses and other current liabilities
|
|
40
|
|
|
Balance as of September 30, 2019
|
|
$
|
(98
|
)
|
|
|
|
|
||||
|
|
|
|
|
|
|
Nine-Month Period Ended September 30, 2018
|
||
Liabilities:
|
|
|
||
Balance as of December 31, 2017
|
|
$
|
(80
|
)
|
Amounts acquired from Juno, including measurement period adjustments
|
|
(116
|
)
|
|
Net change in fair value
|
|
(45
|
)
|
|
Settlements, including transfers to Accrued expenses and other current liabilities
|
|
72
|
|
|
Balance as of September 30, 2018
|
|
$
|
(169
|
)
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Notional Amount
|
||||||
Foreign Currency
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Australian Dollar
|
|
$
|
22
|
|
|
$
|
46
|
|
British Pound
|
|
5
|
|
|
82
|
|
||
Canadian Dollar
|
|
115
|
|
|
158
|
|
||
Euro
|
|
964
|
|
|
1,381
|
|
||
Japanese Yen
|
|
543
|
|
|
424
|
|
||
Total
|
|
$
|
1,649
|
|
|
$
|
2,091
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
Notional Amount (1)
|
||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||
Foreign currency zero-cost collar contracts designated as hedging activity:
|
|
|
|
||||
Purchased Put
|
$
|
791
|
|
|
$
|
1,933
|
|
Written Call
|
916
|
|
|
2,216
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
Notional Amount
|
||||||
|
September 30, 2019
|
|
December 31, 2018
|
||||
Interest rate swap contracts entered into as fair value hedges of the following fixed-rate senior notes:
|
|
|
|
||||
3.875% senior notes due 2025
|
$
|
—
|
|
|
$
|
200
|
|
3.450% senior notes due 2027
|
—
|
|
|
450
|
|
||
3.900% senior notes due 2028
|
—
|
|
|
200
|
|
||
Total
|
$
|
—
|
|
|
$
|
850
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
||||||
|
|
|
|
Fair Value
|
||||||
Instrument
|
|
Balance Sheet Location
|
|
Asset Derivatives
|
|
Liability Derivatives
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
||||||
Foreign exchange contracts (1)
|
|
Other current assets
|
|
$
|
63
|
|
|
$
|
18
|
|
|
|
Other non-current assets
|
|
45
|
|
|
16
|
|
||
|
|
Other non-current liabilities
|
|
12
|
|
|
15
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
7
|
|
|
—
|
|
||
|
|
Other non-current assets
|
|
1
|
|
|
—
|
|
||
|
|
Other non-current liabilities
|
|
1
|
|
|
19
|
|
||
Derivatives not designated as hedging instruments:
|
|
|||||||||
Foreign exchange contracts (1)
|
|
Other current assets
|
|
21
|
|
|
5
|
|
||
|
|
Accrued expenses and other current liabilities
|
|
2
|
|
|
12
|
|
||
Interest rate swap agreements
|
|
Other current assets
|
|
2
|
|
|
3
|
|
||
|
|
Other non-current assets
|
|
5
|
|
|
4
|
|
||
Total
|
|
|
|
$
|
159
|
|
|
$
|
92
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Carrying Amount of the Hedged Liability
|
|
Cumulative Amount of Fair Value Hedging Adjustment Included in the Carrying Amount of the Hedged Liability
|
||||||||||||
Consolidated Balance Sheet Classification in Which the Hedged Item Is Included
|
|
September 30, 2019 (1)
|
|
December 31, 2018 (1)
|
|
September 30, 2019 (2)
|
|
December 31, 2018 (2)
|
||||||||
Current portion of long-term debt, net of discount
|
|
$
|
—
|
|
|
$
|
501
|
|
|
$
|
—
|
|
|
$
|
2
|
|
Long-term debt, net of discount
|
|
8,239
|
|
|
8,227
|
|
|
95
|
|
|
90
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Period Ended September 30, 2019
|
||||||||||||||
Instrument
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative (1) |
|
Classification of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Classification of Gain/(Loss) Recognized in Income Related to Amount Excluded from Effectiveness Testing
|
|
Amount of Gain/(Loss) Recognized in Income on Derivative Related to Amount Excluded from Effectiveness Testing
|
||||||
Foreign exchange contracts
|
$
|
80
|
|
|
Net product sales
|
|
$
|
19
|
|
|
Net product sales
|
|
$
|
(1
|
)
|
Treasury rate lock agreements
|
—
|
|
|
Interest (expense)
|
|
(2
|
)
|
|
N/A
|
|
—
|
|
|||
Forward starting interest rate swaps
|
—
|
|
|
Interest (expense)
|
|
1
|
|
|
N/A
|
|
—
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Period Ended September 30, 2018
|
||||||||||||||
Instrument
|
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative(1) |
|
Classification of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Classification of Gain/(Loss) Recognized in Income Related to Amount Excluded from Effectiveness Testing
|
|
Amount of Gain/(Loss) Recognized in Income on Derivative Related to Amount Excluded from Effectiveness Testing
|
||||||
Foreign exchange contracts
|
|
$
|
54
|
|
|
Net product sales
|
|
$
|
14
|
|
|
Net product sales
|
|
$
|
(3
|
)
|
Treasury rate lock agreements
|
|
—
|
|
|
Interest (expense)
|
|
(1
|
)
|
|
N/A
|
|
—
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||
|
|
Nine-Month Period Ended September 30, 2019
|
||||||||||||||
Instrument
|
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative (1) |
|
Classification of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Classification of Gain/(Loss) Recognized in Income Related to Amount Excluded from Effectiveness Testing
|
|
Amount of Gain/(Loss) Recognized in Income on Derivative Related to Amount Excluded from Effectiveness Testing
|
||||||
Foreign exchange contracts
|
|
$
|
119
|
|
|
Net product sales
|
|
$
|
65
|
|
|
Net product sales
|
|
$
|
(1
|
)
|
Treasury rate lock agreements
|
|
—
|
|
|
Interest (expense)
|
|
(4
|
)
|
|
N/A
|
|
—
|
|
|||
Forward starting interest rate swaps
|
|
—
|
|
|
Interest (expense)
|
|
1
|
|
|
N/A
|
|
—
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Period Ended September 30, 2018
|
||||||||||||||
Instrument
|
|
Amount of
Gain/(Loss) Recognized in OCI on Derivative (1) |
|
Classification of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Amount of
Gain/(Loss) Reclassified from Accumulated OCI into Income |
|
Classification of Gain/(Loss) Recognized in Income Related to Amount Excluded from Effectiveness Testing
|
|
Amount of Gain/(Loss) Recognized in Income on Derivative Related to Amount Excluded from Effectiveness Testing
|
||||||
Foreign exchange contracts
|
|
$
|
185
|
|
|
Net product sales
|
|
$
|
(24
|
)
|
|
Net product sales
|
|
$
|
(5
|
)
|
Treasury rate lock agreements
|
|
(4
|
)
|
|
Interest (expense)
|
|
(3
|
)
|
|
N/A
|
|
—
|
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount of Gain/(Loss) Recognized in
Income on Derivative
|
||||||||||||||
|
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
Instrument
|
|
Classification of Gain/(Loss) Recognized in Income on Derivative
|
|
2019 (1)
|
|
2018 (1)
|
|
2019 (1)
|
|
2018 (1)
|
||||||||
Interest rate swap agreements
|
|
Interest (expense)
|
|
$
|
7
|
|
|
$
|
(1
|
)
|
|
$
|
38
|
|
|
$
|
(8
|
)
|
|
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classification of Gain/(Loss) Recognized in Income on Derivative
|
||||||||||||||
|
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
Instrument
|
|
Classification of Gain/(Loss) Recognized in Income on Derivative
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Foreign exchange contracts
|
|
Other (expense) income, net
|
|
$
|
(8
|
)
|
|
$
|
9
|
|
|
$
|
(3
|
)
|
|
$
|
18
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classification and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
||||||||||
|
|
|
|
|
Three-Month Period Ended September 30, 2019
|
||||||||||
|
|
|
|
|
Net product sales
|
|
Interest (expense)
|
|
Other (expense) income, net
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges
are recorded
|
|
$
|
4,518
|
|
|
$
|
(190
|
)
|
|
$
|
(202
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
The effects of fair value and cash flow hedging:
|
|
|
|
|
|
|
|||||||||
|
(Loss) gain on fair value hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Hedged items
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Derivatives designated as hedging instruments (1)
|
|
—
|
|
|
7
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Gain (loss) on cash flow hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Foreign exchange contracts:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain reclassified from AOCI into income
|
|
19
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
1
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Reclassification adjustment for excluded component (loss)
|
|
(2
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
Treasury rate lock agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of (loss) reclassified from AOCI into income
|
|
—
|
|
|
(2
|
)
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of (loss) reclassified from AOCI into income
|
|
—
|
|
|
1
|
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classification and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
||||||||||
|
|
|
|
|
Three-Month Period Ended September 30, 2018
|
||||||||||
|
|
|
|
|
Net product sales
|
|
Interest (expense)
|
|
Other (expense) income, net
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges
are recorded
|
|
$
|
3,890
|
|
|
$
|
(193
|
)
|
|
$
|
(117
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
The effects of fair value and cash flow hedging:
|
|
|
|
|
|
|
|||||||||
|
Gain (loss) on fair value hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Hedged items
|
|
—
|
|
|
10
|
|
|
—
|
|
|||
|
|
|
Derivatives designated as hedging instruments (1)
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
(Loss) gain on cash flow hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Foreign exchange contracts:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain reclassified from AOCI into income
|
|
14
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
3
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Reclassification adjustment for excluded component (loss)
|
|
(6
|
)
|
|
|
|
|
|||||
|
|
Treasury rate lock agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of (loss) reclassified from AOCI into income
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classification and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
||||||||||
|
|
|
|
|
Nine-Month Period Ended September 30, 2019
|
||||||||||
|
|
|
|
|
Net product sales
|
|
Interest (expense)
|
|
Other (expense) income, net
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges
are recorded
|
|
$
|
12,941
|
|
|
$
|
(574
|
)
|
|
$
|
(76
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
The effects of fair value and cash flow hedging:
|
|
|
|
|
|
|
|||||||||
|
(Loss) gain on fair value hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Hedged items
|
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||
|
|
|
Derivatives designated as hedging instruments (1)
|
|
—
|
|
|
38
|
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Gain (loss) on cash flow hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Foreign exchange contracts:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
65
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
4
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Reclassification adjustment for excluded component (loss) gain
|
|
(5
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
Treasury rate lock agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
—
|
|
|
(4
|
)
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of (loss) reclassified from AOCI into income
|
|
—
|
|
|
1
|
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Classification and Amount of Gain or (Loss) Recognized in Income on Fair Value and Cash Flow Hedging Relationships
|
||||||||||
|
|
|
|
|
Nine-Month Period Ended September 30, 2018
|
||||||||||
|
|
|
|
|
Net product sales
|
|
Interest (expense)
|
|
Other (expense) income, net
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Total amounts of income and expense line items presented in the Consolidated Statements of Income in which the effects of fair value or cash flow hedges
are recorded
|
|
$
|
11,229
|
|
|
$
|
(551
|
)
|
|
$
|
852
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
The effects of fair value and cash flow hedging:
|
|
|
|
|
|
|
|||||||||
|
Gain (loss) on fair value hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Interest rate swap agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Hedged items
|
|
—
|
|
|
35
|
|
|
—
|
|
|||
|
|
|
Derivatives designated as hedging instruments (1)
|
|
—
|
|
|
(8
|
)
|
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
(Loss) gain on cash flow hedging relationships
|
|
|
|
|
|
|
||||||||
|
|
Foreign exchange contracts:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
(24
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
18
|
|
|
—
|
|
|
—
|
|
|||
|
|
|
Reclassification adjustment for excluded component (loss) gain
|
|
(23
|
)
|
|
—
|
|
|
—
|
|
|||
|
|
Treasury rate lock agreements:
|
|
|
|
|
|
|
|||||||
|
|
|
Amount of gain or (loss) reclassified from AOCI into income
|
|
—
|
|
|
(3
|
)
|
|
—
|
|
|||
|
|
|
Amount excluded from effectiveness testing recognized using a systematic and rational amortization approach / changes in fair value
|
|
—
|
|
|
—
|
|
|
—
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Estimated Fair Value
|
||||||||
Time deposits (1) and Repurchase agreements (1)
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
Total debt securities available-for-sale
|
|
$
|
14
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
14
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2018
|
|
Amortized Cost
|
|
Gross Unrealized Gain
|
|
Gross Unrealized Loss
|
|
Estimated Fair Value
|
||||||||
Ultra short income fund
|
|
$
|
450
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
450
|
|
Time deposits (1) and Repurchase agreements (1)
|
|
46
|
|
|
—
|
|
|
—
|
|
|
46
|
|
||||
Total debt securities available-for-sale
|
|
$
|
496
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
496
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Amortized
Cost
|
|
Fair
Value
|
||||
Duration of one year or less
|
|
$
|
14
|
|
|
$
|
14
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
Raw materials
|
$
|
230
|
|
|
$
|
252
|
|
Work in process
|
103
|
|
|
79
|
|
||
Finished goods
|
118
|
|
|
127
|
|
||
Total inventory
|
$
|
451
|
|
|
$
|
458
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Intangible Assets, Net
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|||
Acquired developed product rights
|
|
$
|
3,933
|
|
|
$
|
(2,536
|
)
|
|
$
|
1,397
|
|
Technology
|
|
1,743
|
|
|
(616
|
)
|
|
1,127
|
|
|||
Licenses
|
|
66
|
|
|
(37
|
)
|
|
29
|
|
|||
Other
|
|
43
|
|
|
(40
|
)
|
|
3
|
|
|||
|
|
5,785
|
|
|
(3,229
|
)
|
|
2,556
|
|
|||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|||
Acquired IPR&D product rights
|
|
13,831
|
|
|
—
|
|
|
13,831
|
|
|||
Total intangible assets
|
|
$
|
19,616
|
|
|
$
|
(3,229
|
)
|
|
$
|
16,387
|
|
|
|
|
|
|
|
|
||||||
December 31, 2018
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Intangible Assets, Net
|
||||||
Amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|||
Acquired developed product rights
|
|
$
|
3,406
|
|
|
$
|
(2,261
|
)
|
|
$
|
1,145
|
|
Technology
|
|
1,743
|
|
|
(552
|
)
|
|
1,191
|
|
|||
Licenses
|
|
66
|
|
|
(35
|
)
|
|
31
|
|
|||
Other
|
|
54
|
|
|
(39
|
)
|
|
15
|
|
|||
|
|
5,269
|
|
|
(2,887
|
)
|
|
2,382
|
|
|||
Non-amortizable intangible assets:
|
|
|
|
|
|
|
|
|
|
|||
Acquired IPR&D product rights
|
|
13,831
|
|
|
—
|
|
|
13,831
|
|
|||
Total intangible assets
|
|
$
|
19,100
|
|
|
$
|
(2,887
|
)
|
|
$
|
16,213
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
2.250% senior notes due 2019
|
$
|
—
|
|
|
$
|
501
|
|
2.875% senior notes due 2020
|
1,498
|
|
|
—
|
|
||
|
$
|
1,498
|
|
|
$
|
501
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
September 30, 2019
|
|
December 31, 2018
|
||||
2.875% senior notes due 2020
|
$
|
—
|
|
|
$
|
1,497
|
|
3.950% senior notes due 2020
|
505
|
|
|
509
|
|
||
2.250% senior notes due 2021
|
498
|
|
|
498
|
|
||
2.875% senior notes due 2021
|
499
|
|
|
498
|
|
||
3.250% senior notes due 2022
|
1,027
|
|
|
1,034
|
|
||
3.550% senior notes due 2022
|
997
|
|
|
996
|
|
||
2.750% senior notes due 2023
|
747
|
|
|
747
|
|
||
3.250% senior notes due 2023
|
995
|
|
|
994
|
|
||
4.000% senior notes due 2023
|
725
|
|
|
730
|
|
||
3.625% senior notes due 2024
|
1,000
|
|
|
1,000
|
|
||
3.875% senior notes due 2025
|
2,486
|
|
|
2,478
|
|
||
3.450% senior notes due 2027
|
1,004
|
|
|
986
|
|
||
3.900% senior notes due 2028
|
1,491
|
|
|
1,490
|
|
||
5.700% senior notes due 2040
|
248
|
|
|
247
|
|
||
5.250% senior notes due 2043
|
393
|
|
|
393
|
|
||
4.625% senior notes due 2044
|
988
|
|
|
987
|
|
||
5.000% senior notes due 2045
|
1,976
|
|
|
1,975
|
|
||
4.350% senior notes due 2047
|
1,234
|
|
|
1,234
|
|
||
4.550% senior notes due 2048
|
1,476
|
|
|
1,476
|
|
||
Total long-term debt
|
$
|
18,289
|
|
|
$
|
19,769
|
|
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Periods Ended September 30,
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
Cost of goods sold (excluding amortization of acquired intangible assets)
|
|
$
|
7
|
|
|
$
|
9
|
|
|
$
|
32
|
|
|
$
|
27
|
|
Research and development (1)
|
|
88
|
|
|
125
|
|
|
326
|
|
|
481
|
|
||||
Selling, general and administrative (2)
|
|
81
|
|
|
104
|
|
|
300
|
|
|
415
|
|
||||
Total share-based compensation expense
|
|
176
|
|
|
238
|
|
|
658
|
|
|
923
|
|
||||
Tax benefit related to share-based compensation expense (3)
|
|
32
|
|
|
53
|
|
|
123
|
|
|
127
|
|
||||
Reduction in net income
|
|
$
|
144
|
|
|
$
|
185
|
|
|
$
|
535
|
|
|
$
|
796
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
Stock
Options
|
|
RSUs
|
|
PSUs (in thousands)
|
|||
Outstanding as of December 31, 2018
|
71.1
|
|
|
11.7
|
|
|
660
|
|
Changes during the Year:
|
|
|
|
|
|
|
|
|
Granted
|
—
|
|
|
8.5
|
|
|
200
|
|
Exercised / Released
|
(9.4
|
)
|
|
(1.5
|
)
|
|
(165
|
)
|
Forfeited
|
(2.4
|
)
|
|
(1.0
|
)
|
|
(46
|
)
|
Outstanding as of September 30, 2019
|
59.3
|
|
|
17.7
|
|
|
649
|
|
|
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
Options
|
|
RSUs
|
|
PSUs
|
||||||
Unrecognized compensation cost
|
$
|
273
|
|
|
$
|
787
|
|
|
$
|
23
|
|
Expected weighted-average period in years of compensation cost to be recognized
|
1.8
|
|
|
1.8
|
|
|
1.6
|
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three-Month Periods Ended September 30,
|
||||||||||||||||||
|
Research and Development Expense
|
|
|
||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/Termination of Arrangements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
||||||||||
2019
|
$
|
151
|
|
|
$
|
7
|
|
|
$
|
30
|
|
|
$
|
2
|
|
|
$
|
59
|
|
2018
|
8
|
|
|
—
|
|
|
3
|
|
|
1
|
|
|
2
|
|
|
|||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine-Month Periods Ended September 30,
|
||||||||||||||||||
|
Research and Development Expense
|
|
|
||||||||||||||||
|
Upfront Fees
|
|
Milestones
|
|
Extension/Termination of Arrangements
|
|
Amortization of Prepaid Research and Development
|
|
Equity Investments Made During Period
|
||||||||||
2019
|
$
|
420
|
|
|
$
|
64
|
|
|
$
|
30
|
|
|
$
|
5
|
|
|
$
|
135
|
|
2018
|
399
|
|
|
15
|
|
|
7
|
|
|
5
|
|
|
123
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
Balances as of:
|
|
Intangible Asset Balance
|
|
Equity Investment Balance
|
|
Percentage of Outstanding Equity
|
||||
September 30, 2019
|
|
$
|
7
|
|
|
$
|
923
|
|
|
N/A
|
December 31, 2018
|
|
13
|
|
|
1,280
|
|
|
N/A
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Three-Month Period Ended September 30, 2019
|
|
Nine-Month Period Ended September 30, 2019
|
||||
Operating lease cost
|
|
$
|
22
|
|
|
$
|
69
|
|
Short-term lease cost
|
|
—
|
|
|
—
|
|
||
Variable lease cost
|
|
10
|
|
|
27
|
|
||
Sublease income
|
|
—
|
|
|
—
|
|
||
Total lease cost
|
|
$
|
32
|
|
|
$
|
96
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Three-Month Period Ended September 30, 2019
|
|
Nine-Month Period Ended September 30, 2019
|
||||
Cash paid for amounts included in measurement of lease liabilities:
|
|
|
|
|
||||
Operating cash flows from operating leases
|
|
$
|
24
|
|
|
$
|
74
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Three-Month Period Ended September 30, 2019
|
|
Nine-Month Period Ended September 30, 2019
|
||||
ROU assets obtained in exchange for new operating liabilities
|
|
$
|
3
|
|
|
$
|
32
|
|
|
||||
|
|
|
|
|
|
|
September 30, 2019
|
||
Operating Leases
|
|
|
||
Other non-current assets
|
|
$
|
255
|
|
Accrued expenses and other current liabilities
|
|
78
|
|
|
Other non-current liabilities
|
|
204
|
|
|
|
|
|
||
Weighted-average remaining lease term (years) - operating leases
|
|
4.12
|
|
|
Weighted-average discount rate - operating leases
|
|
3.99
|
%
|
|
||||
|
|
|
|
|
|
|
Operating Leases
|
||
2019 (excluding the nine-month period ended September 30, 2019)
|
|
$
|
23
|
|
2020
|
|
89
|
|
|
2021
|
|
69
|
|
|
2022
|
|
57
|
|
|
2023
|
|
42
|
|
|
2024
|
|
16
|
|
|
Thereafter
|
|
11
|
|
|
Total undiscounted lease payments
|
|
$
|
307
|
|
|
|
|
||
Less: imputed interest
|
|
(25
|
)
|
|
Total discounted lease payments
|
|
$
|
282
|
|
|
||||
|
|
|
|
|
|
|
Operating Leases
|
||
2019
|
|
$
|
92
|
|
2020
|
|
89
|
|
|
2021
|
|
70
|
|
|
2022
|
|
59
|
|
|
2023
|
|
45
|
|
|
Thereafter
|
|
68
|
|
|
Total minimum lease payments
|
|
$
|
423
|
|
|
• |
the merger of Bristol-Myers Squibb Company (“Bristol-Myers Squibb”) and Celgene Corporation (“Celgene”), consummated on November 20, 2019, which is referred to herein as the
Celgene merger, and related financing, which is referred to herein as the Celgene merger financing;
|
|
• |
the divestiture of the OTEZLA® (apremilast) product line (“Otezla”), consummated on November 21, 2019, which is referred to herein as the Otezla divestiture; and
|
|
• |
the acquisition of Juno Therapeutics, Inc. (“Juno”), by Celgene on March 6, 2018, which is referred to herein as the Juno acquisition, and related financing, which is referred
to herein as the Juno acquisition financing. Each as fully described in ‘‘Note 1. Description of the Celgene merger, Otezla divestiture and Juno acquisition.’’
|
Historical
|
|
||||||||||||||||||||
Bristol-Myers
Squibb after
reclassification
(Note 4)
|
Celgene after
reclassification
(Note 5)
|
Celgene merger
adjustments (Note 7) |
Notes
|
Otezla divestiture
adjustments (Note 9) |
Pro forma
combined company
|
||||||||||||||||
ASSETS
|
|||||||||||||||||||||
Current Assets:
|
|||||||||||||||||||||
Cash and cash equivalents
|
$
|
30,489
|
$
|
9,604
|
$
|
(36,104
|
)
|
(a),(i),(j)
|
$
|
13,400
|
$
|
17,389
|
|||||||||
Marketable debt securities
|
2,053
|
14
|
-
|
-
|
2,067
|
||||||||||||||||
Receivables
|
5,351
|
2,620
|
-
|
-
|
7,971
|
||||||||||||||||
Inventories
|
1,192
|
451
|
3,111
|
(f),(l)
|
-
|
4,754
|
|||||||||||||||
Other current assets
|
1,714
|
400
|
13
|
(c)
|
-
|
2,126
|
|||||||||||||||
Assets held for sale
|
-
|
-
|
13,427
|
(l)
|
(13,427
|
)
|
-
|
||||||||||||||
Total Current Assets
|
40,799
|
13,089
|
(19,553
|
)
|
(27
|
)
|
34,308
|
||||||||||||||
Property, plant and equipment
|
4,830
|
1,353
|
-
|
-
|
6,183
|
||||||||||||||||
Goodwill
|
6,513
|
8,003
|
11,721
|
-
|
26,237
|
||||||||||||||||
Other intangible assets
|
1,002
|
16,449
|
47,583
|
(e)
|
-
|
65,034
|
|||||||||||||||
Deferred income taxes
|
1,016
|
-
|
535
|
(h),(i),(j)
|
-
|
1,552
|
|||||||||||||||
Marketable debt securities
|
925
|
-
|
-
|
-
|
925
|
||||||||||||||||
Other non-current assets
|
2,348
|
2,383
|
971
|
(f),(g),(l)
|
-
|
5,702
|
|||||||||||||||
Total Assets
|
$
|
57,433
|
$
|
41,277
|
$
|
41,258
|
$
|
(27
|
)
|
$
|
139,941
|
||||||||||
LIABILITIES
|
|||||||||||||||||||||
Current Liabilities
|
|||||||||||||||||||||
Short-term debt obligations
|
$
|
569
|
$
|
1,498
|
$
|
11
|
(g)
|
$
|
-
|
$
|
2,078
|
||||||||||
Accounts payable
|
1,888
|
421
|
-
|
-
|
2,309
|
||||||||||||||||
Other current liabilities
|
8,032
|
3,004
|
(21
|
)
|
(l)
|
-
|
11,015
|
||||||||||||||
Liabilities held for sale
|
-
|
-
|
27
|
(l)
|
(27
|
)
|
-
|
||||||||||||||
Total Current Liabilities
|
10,489
|
4,923
|
18
|
(27
|
)
|
15,402
|
|||||||||||||||
Deferred income taxes
|
54
|
2,854
|
6,890
|
(h)
|
-
|
9,798
|
|||||||||||||||
Other non-current liabilities
|
4,746
|
3,124
|
1,738
|
(c),(l)
|
-
|
9,608
|
|||||||||||||||
Long-term debt
|
24,390
|
18,289
|
2,073
|
(g)
|
-
|
44,752
|
|||||||||||||||
Total Liabilities
|
39,679
|
29,190
|
10,718
|
(27
|
)
|
79,560
|
|||||||||||||||
EQUITY
|
|||||||||||||||||||||
Shareholders’ Equity:
|
|||||||||||||||||||||
Preferred stock
|
-
|
-
|
-
|
-
|
-
|
||||||||||||||||
Common stock
|
221
|
10
|
61
|
(b),(k)
|
-
|
292
|
|||||||||||||||
Capital in excess of par value of stock
|
2,206
|
16,072
|
26,649
|
(b),(d),(k)
|
-
|
44,927
|
|||||||||||||||
Accumulated other comprehensive loss
|
(1,463
|
)
|
(27
|
)
|
27
|
(k)
|
-
|
(1,463
|
)
|
||||||||||||
Retained earnings
|
36,555
|
22,366
|
(22,532
|
)
|
(i),(j),(k)
|
-
|
36,389
|
||||||||||||||
Less cost of treasury stock
|
(19,871
|
)
|
(26,334
|
)
|
26,334
|
(k)
|
-
|
(19,871
|
)
|
||||||||||||
Total Shareholders’ Equity
|
17,648
|
12,087
|
30,539
|
-
|
60,274
|
||||||||||||||||
Noncontrolling interest
|
106
|
-
|
-
|
-
|
106
|
||||||||||||||||
Total Equity
|
17,754
|
12,087
|
30,539
|
-
|
60,380
|
||||||||||||||||
Total Liabilities and Equity
|
$
|
57,433
|
$
|
41,277
|
$
|
41,258
|
$
|
(27
|
)
|
$
|
139,941
|
Historical
|
|
||||||||||||||||||||||||||
Bristol-Myers
Squibb after
reclassification
(Note 4)
|
Celgene after
reclassification (Note 5) |
Celgene merger
adjustments (Note 8) |
Notes
|
Celgene merger
financing
adjustments
(Note 8)
|
Notes
|
Otezla divestiture
adjustments (Note 9) |
Pro forma
combined
company
|
|
|||||||||||||||||||
|
|||||||||||||||||||||||||||
Net product sales
|
$
|
17,512
|
$
|
12,877
|
$
|
-
|
$
|
-
|
$
|
(1,424
|
)
|
$
|
28,965
|
|
|||||||||||||
Alliance and other revenues
|
688
|
4
|
-
|
-
|
-
|
692
|
|
||||||||||||||||||||
Total Revenues
|
18,200
|
12,881
|
-
|
-
|
(1,424
|
)
|
29,657
|
|
|||||||||||||||||||
|
|||||||||||||||||||||||||||
Cost of products sold (a)
|
5,576
|
372
|
160
|
(a),(f)
|
-
|
(38
|
)
|
6,071
|
|
||||||||||||||||||
Marketing, selling and administrative
|
3,137
|
2,205
|
-
|
-
|
(474
|
)
|
4,868
|
|
|||||||||||||||||||
Research and development
|
4,051
|
3,571
|
-
|
-
|
(144
|
)
|
7,478
|
|
|||||||||||||||||||
Amortization of acquired intangibles assets
|
83
|
327
|
6,454
|
(a)
|
-
|
-
|
6,864
|
|
|||||||||||||||||||
Other (income)/expense, net
|
249
|
854
|
(141
|
)
|
(b),(c),
(d),(e)
|
150
|
(i)
|
-
|
1,113
|
|
|||||||||||||||||
Total Expenses
|
13,096
|
7,329
|
6,474
|
150
|
(656
|
)
|
26,393
|
|
|||||||||||||||||||
|
|||||||||||||||||||||||||||
Earnings/(Loss) Before Income Taxes
|
5,104
|
5,552
|
(6,474
|
)
|
(150
|
)
|
(768
|
)
|
3,264
|
|
|||||||||||||||||
Provision for income taxes
|
584
|
745
|
(695
|
)
|
(g)
|
(31
|
)
|
(j)
|
(173
|
)
|
430
|
|
|||||||||||||||
Net Earnings/(Loss)
|
4,520
|
4,807
|
(5,778
|
)
|
(119
|
)
|
(595
|
)
|
2,834
|
|
|||||||||||||||||
Noncontrolling Interest
|
25
|
-
|
-
|
-
|
-
|
25
|
|
||||||||||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
|
$
|
4,495
|
$
|
4,807
|
$
|
(5,778
|
)
|
$
|
(119
|
)
|
$
|
(595
|
)
|
$
|
2,809
|
|
|||||||||||
|
|||||||||||||||||||||||||||
Earnings per Common Share
|
|
||||||||||||||||||||||||||
Basic
|
$
|
2.75
|
$
|
6.81
|
$
|
1.20
|
(h)
|
||||||||||||||||||||
Diluted
|
$
|
2.75
|
$
|
6.63
|
$
|
1.18
|
(h)
|
||||||||||||||||||||
|
|||||||||||||||||||||||||||
Weighted Average Shares
|
|
||||||||||||||||||||||||||
Basic
|
1,634
|
706
|
2,349
|
(h)
|
|||||||||||||||||||||||
Diluted
|
1,636
|
726
|
2,387
|
(h)
|
(a)
|
Excludes amortization of acquired intangible assets.
|
|
Historical
|
|
||||||||||||||||||||||||||||||||||||||
Bristol-Myers
Squibb after
reclassification
(Note 4)
|
Celgene after
reclassification (Note 5) |
Juno after
reclassification (Note 10) |
Juno acquisition
and financing
adjustments (Note 12) |
Notes
|
Pro forma
Celgene and
Juno
|
Celgene merger
adjustments (Note 8) |
Notes
|
Celgene merger
financing
adjustments
(Note 8)
|
Notes
|
Otezla divestiture
adjustments (Note 9) |
Pro forma
combined
company
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Net product sales
|
$
|
21,581
|
$
|
15,275
|
$
|
-
|
$
|
-
|
$
|
15,275
|
$
|
-
|
$
|
-
|
$
|
(1,608
|
)
|
$
|
35,248
|
|||||||||||||||||||||
Alliance and other revenues
|
980
|
16
|
28
|
(18
|
)
|
(a)
|
26
|
-
|
-
|
-
|
1,006
|
|||||||||||||||||||||||||||||
Total Revenues
|
22,561
|
15,291
|
28
|
(18
|
)
|
15,301
|
-
|
-
|
(1,608
|
)
|
36,254
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Cost of products sold (a)
|
6,467
|
569
|
-
|
-
|
569
|
3,175
|
(a),(f)
|
-
|
(53
|
)
|
10,158
|
|||||||||||||||||||||||||||||
Marketing, selling and administrative
|
4,551
|
3,043
|
29
|
(208
|
)
|
(c)
|
2,864
|
-
|
-
|
(639
|
)
|
6,776
|
||||||||||||||||||||||||||||
Research and development
|
6,332
|
5,811
|
79
|
(333
|
)
|
(a),(b),(c)
|
5,557
|
2
|
(a)
|
-
|
(213
|
)
|
11,678
|
|||||||||||||||||||||||||||
Amortization of acquired intangibles assets
|
97
|
468
|
-
|
14
|
(b)
|
482
|
8,558
|
(a)
|
-
|
-
|
9,137
|
|||||||||||||||||||||||||||||
Other (income)/expense, net
|
(854
|
)
|
568
|
82
|
303
|
(c),(d),
(e),(f)
|
953
|
(72
|
)
|
(b),(c),
(d),(e)
|
677
|
(i)
|
-
|
704
|
||||||||||||||||||||||||||
Total Expenses
|
16,593
|
10,459
|
190
|
(224
|
)
|
10,425
|
11,662
|
677
|
(905
|
)
|
38,452
|
|||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Earnings/(Loss) Before Income Taxes
|
5,968
|
4,832
|
(162
|
)
|
206
|
4,876
|
(11,662
|
)
|
(677
|
)
|
(703
|
)
|
(2,198
|
)
|
||||||||||||||||||||||||||
Provision for income taxes
|
1,021
|
786
|
-
|
32
|
(g)
|
818
|
(1,052
|
)
|
(g)
|
(139
|
)
|
(j)
|
(158
|
)
|
491
|
|||||||||||||||||||||||||
Net Earnings/(Loss)
|
4,947
|
4,046
|
(162
|
)
|
174
|
4,058
|
(10,611
|
)
|
(538
|
)
|
(545
|
)
|
(2,689
|
)
|
||||||||||||||||||||||||||
Noncontrolling Interest
|
27
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
27
|
|||||||||||||||||||||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
|
$
|
4,920
|
$
|
4,046
|
$
|
(162
|
)
|
$
|
174
|
$
|
4,058
|
$
|
(10,611
|
)
|
$
|
(538
|
)
|
$
|
(545
|
)
|
$
|
(2,716
|
)
|
|||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Earnings per Common Share
|
|
|||||||||||||||||||||||||||||||||||||||
Basic
|
$
|
3.01
|
$
|
5.65
|
$
|
(1.16
|
)
|
(h)
|
||||||||||||||||||||||||||||||||
Diluted
|
$
|
3.01
|
$
|
5.51
|
$
|
(1.16
|
)
|
(h)
|
||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||
Weighted Average Shares
|
|
|||||||||||||||||||||||||||||||||||||||
Basic
|
1,633
|
716
|
2,348
|
(h)
|
||||||||||||||||||||||||||||||||||||
Diluted
|
1,637
|
734
|
2,348
|
(h)
|
(a)
|
Excludes amortization of acquired intangible assets.
|
Note 1.
|
Description of the Celgene merger, Otezla divestiture and Juno acquisition
|
Note 2.
|
Basis of presentation
|
Note 3.
|
Accounting policies
|
Note 4.
|
Historical Bristol-Myers Squibb
|
Bristol-Myers
Squibb before
reclassification
|
Reclassification
|
Notes
|
Bristol-Myers
Squibb after
reclassification
|
|||||||||||||
ASSETS
|
||||||||||||||||
Current Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
30,489
|
$
|
-
|
$
|
30,489
|
||||||||||
Marketable debt securities
|
2,053
|
-
|
2,053
|
|||||||||||||
Receivables
|
5,510
|
(159
|
)
|
(1)
|
|
5,351
|
||||||||||
Inventories
|
1,192
|
-
|
1,192
|
|||||||||||||
Other current assets
|
947
|
767
|
(1) |
|
1,714
|
|||||||||||
Assets held for sale
|
-
|
-
|
-
|
|||||||||||||
Total Current Assets
|
40,191
|
608
|
40,799
|
|||||||||||||
Property, plant and equipment
|
4,830
|
-
|
4,830
|
|||||||||||||
Goodwill
|
6,513
|
-
|
6,513
|
|||||||||||||
Other intangible assets
|
1,002
|
-
|
1,002
|
|||||||||||||
Deferred income taxes
|
1,624
|
(608
|
)
|
(1)
|
|
1,016
|
||||||||||
Marketable debt securities
|
925
|
-
|
925
|
|||||||||||||
Other non-current assets
|
2,348
|
-
|
2,348
|
|||||||||||||
Total Assets
|
$
|
57,433
|
$
|
-
|
$
|
57,433
|
||||||||||
LIABILITIES
|
||||||||||||||||
Current Liabilities
|
||||||||||||||||
Short-term debt obligations
|
$
|
569
|
$
|
-
|
$
|
569
|
||||||||||
Accounts payable
|
1,888
|
-
|
1,888
|
|||||||||||||
Other current liabilities
|
8,032
|
-
|
8,032
|
|||||||||||||
Liabilities held for sale
|
-
|
-
|
-
|
|||||||||||||
Total Current Liabilities
|
10,489
|
-
|
10,489
|
|||||||||||||
Income taxes payable
|
2,919
|
(2,919
|
)
|
(2)
|
|
-
|
||||||||||
Deferred income taxes
|
-
|
54
|
(2)
|
|
54
|
|||||||||||
Other non-current liabilities
|
1,881
|
2,865
|
(2)
|
|
4,746
|
|||||||||||
Long-term debt
|
24,390
|
-
|
24,390
|
|||||||||||||
Total Liabilities
|
39,679
|
-
|
39,679
|
|||||||||||||
EQUITY
|
||||||||||||||||
Shareholders’ Equity:
|
||||||||||||||||
Preferred stock
|
-
|
-
|
-
|
|||||||||||||
Common stock
|
221
|
-
|
221
|
|||||||||||||
Capital in excess of par value of stock
|
2,206
|
-
|
2,206
|
|||||||||||||
Accumulated other comprehensive loss
|
(1,463
|
)
|
-
|
(1,463
|
)
|
|||||||||||
Retained earnings
|
36,555
|
-
|
36,555
|
|||||||||||||
Less cost of treasury stock
|
(19,871
|
)
|
-
|
(19,871
|
)
|
|||||||||||
Total Shareholders’ Equity
|
17,648
|
-
|
17,648
|
|||||||||||||
Noncontrolling interest
|
106
|
-
|
106
|
|||||||||||||
Total Equity
|
17,754
|
-
|
17,754
|
|||||||||||||
Total Liabilities and Equity
|
$
|
57,433
|
$
|
-
|
$
|
57,433
|
(1)
|
Reclassification of prepaid income taxes on intercompany profits ($608 million) from “Deferred income taxes” and prepaid and refundable income taxes ($159
million) from “Receivables” to “Other current assets.”
|
(2)
|
Reclassification of “Income taxes payable” to “Deferred income taxes” ($54 million) and to “Other non-current liabilities” ($2,865 million).
|
Bristol-Myers
Squibb before
reclassification
|
Reclassification
|
Notes
|
Bristol-Myers
Squibb after
reclassification
|
|||||||||||||
Net product sales
|
$
|
17,512
|
$
|
-
|
$
|
17,512
|
||||||||||
Alliance and other revenues
|
688
|
-
|
688
|
|||||||||||||
Total Revenues
|
18,200
|
-
|
18,200
|
|||||||||||||
Cost of products sold (a)
|
5,646
|
(70
|
)
|
(1)
|
|
5,576
|
||||||||||
Marketing, selling and administrative
|
3,137
|
-
|
3,137
|
|||||||||||||
Research and development
|
4,061
|
(10
|
)
|
(1)
|
4,051
|
|||||||||||
Amortization of acquired intangibles assets
|
-
|
83
|
(1)
|
|
83
|
|||||||||||
Other (income)/expense, net
|
252
|
(3
|
)
|
(1)
|
|
249
|
||||||||||
Total Expenses
|
13,096
|
-
|
13,096
|
|||||||||||||
Earnings/(Loss) Before Income Taxes
|
5,104
|
-
|
5,104
|
|||||||||||||
Provision for income taxes
|
584
|
-
|
584
|
|||||||||||||
Net Earnings/(Loss)
|
4,520
|
-
|
4,520
|
|||||||||||||
Noncontrolling Interest
|
25
|
-
|
25
|
|||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
|
$
|
4,495
|
$
|
-
|
$
|
4,495
|
(a)
|
Excludes amortization of acquired intangible assets.
|
(1)
|
Reclassification of amortization of acquired intangible assets from “Cost of products sold” ($70 million), “Research and development” ($10 million) and “Other
income (net)” ($3 million) to “Amortization of acquired intangible assets”.
|
Bristol-Myers
Squibb before
reclassification
|
Reclassification
|
Notes
|
Bristol-Myers
Squibb after
reclassification
|
|||||||||||||
Net product sales
|
$
|
21,581
|
$
|
-
|
$
|
21,581
|
||||||||||
Alliance and other revenues
|
980
|
-
|
980
|
|||||||||||||
Total Revenues
|
22,561
|
-
|
22,561
|
|||||||||||||
Cost of products sold (a)
|
6,547
|
(80
|
)
|
(1)
|
|
6,467
|
||||||||||
Marketing, selling and administrative
|
4,551
|
-
|
4,551
|
|||||||||||||
Research and development
|
6,345
|
(13
|
)
|
(1)
|
|
6,332
|
||||||||||
Amortization of acquired intangibles assets
|
-
|
97
|
(1)
|
|
97
|
|||||||||||
Other (income)/expense, net
|
(850
|
)
|
(4
|
)
|
(1)
|
|
(854
|
)
|
||||||||
Total Expenses
|
16,593
|
-
|
16,593
|
|||||||||||||
Earnings/(Loss) Before Income Taxes
|
5,968
|
-
|
5,968
|
|||||||||||||
Provision for income taxes
|
1,021
|
-
|
1,021
|
|||||||||||||
Net Earnings/(Loss)
|
4,947
|
-
|
4,947
|
|||||||||||||
Noncontrolling Interest
|
27
|
-
|
27
|
|||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
|
$
|
4,920
|
$
|
-
|
$
|
4,920
|
(a)
|
Excludes amortization of acquired intangible assets.
|
(1)
|
Reclassification of amortization of acquired intangible assets from “Cost of products sold” ($80 million), “Research and development” ($13 million) and “Other
income (net)” ($4 million) to “Amortization of acquired intangible assets”.
|
Note 5.
|
Historical Celgene
|
Celgene before
reclassification
|
Reclassification
|
Notes
|
Celgene after
reclassification
|
|||||||||||||
ASSETS
|
||||||||||||||||
Current Assets:
|
||||||||||||||||
Cash and cash equivalents
|
$
|
9,604
|
$
|
-
|
$
|
9,604
|
||||||||||
Debt securities available-for-sale
|
14
|
(14
|
)
|
(1)
|
|
-
|
||||||||||
Equity investments with readily determinable fair values
|
1,279
|
(1,279
|
)
|
(2)
|
|
-
|
||||||||||
Marketable debt securities
|
-
|
14
|
(1)
|
|
14
|
|||||||||||
Receivables
|
2,374
|
246
|
(3),(4)
|
|
2,620
|
|||||||||||
Inventories
|
451
|
-
|
|
451
|
||||||||||||
Other current assets
|
732
|
(332
|
)
|
(4)
|
|
400
|
||||||||||
Total Current Assets
|
14,454
|
(1,365
|
)
|
|
13,089
|
|||||||||||
Property, plant and equipment
|
1,415
|
(62
|
)
|
(5)
|
|
1,353
|
||||||||||
Goodwill
|
8,003
|
-
|
|
8,003
|
||||||||||||
Other intangible assets
|
16,387
|
62
|
(5)
|
|
16,449
|
|||||||||||
Deferred income taxes
|
-
|
-
|
|
-
|
||||||||||||
Marketable debt securities
|
-
|
-
|
|
-
|
||||||||||||
Other non-current assets
|
1,104
|
1,279
|
(2)
|
|
2,383
|
|||||||||||
Total Assets
|
$
|
41,363
|
$
|
(86
|
)
|
|
$
|
41,277
|
||||||||
LIABILITIES
|
||||||||||||||||
Current Liabilities
|
||||||||||||||||
Short-term debt obligations
|
$
|
1,498
|
$
|
-
|
$
|
1,498
|
||||||||||
Accounts payable
|
421
|
-
|
421
|
|||||||||||||
Other current liabilities
|
2,964
|
40
|
(3),(6)
|
|
3,004
|
|||||||||||
Deferred income
|
44
|
(44
|
)
|
(6)
|
|
-
|
||||||||||
Income taxes payable
|
82
|
(82
|
)
|
(6)
|
|
-
|
||||||||||
Total Current Liabilities
|
5,009
|
(86
|
)
|
|
4,923
|
|||||||||||
Deferred income
|
16
|
(16
|
)
|
(7)
|
|
-
|
||||||||||
Income taxes payable
|
2,454
|
(2,454
|
)
|
(7)
|
|
-
|
||||||||||
Deferred income taxes
|
2,854
|
-
|
|
2,854
|
||||||||||||
Other non-current liabilities
|
654
|
2,470
|
(7)
|
|
3,124
|
|||||||||||
Long-term debt
|
18,289
|
-
|
18,289
|
|||||||||||||
Total Liabilities
|
29,276
|
(86
|
)
|
29,190
|
||||||||||||
EQUITY
|
||||||||||||||||
Shareholders’ Equity:
|
||||||||||||||||
Preferred stock
|
-
|
-
|
-
|
|||||||||||||
Common stock
|
10
|
-
|
10
|
|||||||||||||
Capital in excess of par value of stock
|
16,072
|
-
|
16,072
|
|||||||||||||
Accumulated other comprehensive loss
|
(27
|
)
|
-
|
(27
|
)
|
|||||||||||
Retained earnings
|
22,366
|
-
|
22,366
|
|||||||||||||
Less cost of treasury stock
|
(26,334
|
)
|
-
|
(26,334
|
)
|
|||||||||||
Total Shareholders’ Equity
|
12,087
|
-
|
12,087
|
|||||||||||||
Noncontrolling interest
|
-
|
-
|
-
|
|||||||||||||
Total Equity
|
12,087
|
-
|
12,087
|
|||||||||||||
Total Liabilities and Equity
|
$
|
41,363
|
$
|
(86
|
)
|
$
|
41,277
|
(1)
|
Reclassification of ‘‘Debt securities available-for-sale’’ ($14 million) to ‘‘Marketable debt securities.’’
|
(2)
|
Reclassification of “Equity investments with readily determinable fair values” ($1,279 million) to “Other non-current assets”.
|
(3)
|
Reclassification of chargebacks ($86 million) from “Other current liabilities” to “Receivables”.
|
(4)
|
Reclassification of other receivables ($332 million) from “Other current assets” to “Receivables”.
|
(5)
|
Reclassification of capitalized software ($62 million) from “Property, plant, and equipment” to “Other intangible assets”.
|
(6)
|
Reclassification of “Deferred income” ($44 million) and “Income taxes payable” ($82 million) to “Other current liabilities”.
|
(7)
|
Reclassification of “Deferred income” ($16 million) and “Income taxes payable” ($2,454 million) to “Other non-current liabilities”.
|
Celgene before
reclassification
|
Reclassification
|
Notes
|
Celgene after
reclassification
|
|||||||||||||
Net product sales
|
$
|
12,941
|
$
|
(64
|
)
|
(1)
|
|
$
|
12,877
|
|||||||
Alliance and other revenues
|
4
|
-
|
4
|
|||||||||||||
Total Revenues
|
12,945
|
(64
|
)
|
12,881
|
||||||||||||
Cost of products sold (a)
|
458
|
(86
|
)
|
(1),(4)
|
|
372
|
||||||||||
Marketing, selling and administrative
|
2,347
|
(142
|
)
|
(3),(4)
|
|
2,205
|
||||||||||
Research and development
|
3,483
|
88
|
(4)
|
|
3,571
|
|||||||||||
Amortization of acquired intangible assets
|
327
|
-
|
|
327
|
||||||||||||
Acquisition related charges and restructuring, net
|
245
|
(245
|
)
|
(2)
|
|
-
|
||||||||||
Interest and investment income, net
|
(117
|
)
|
117
|
(2)
|
|
-
|
||||||||||
Interest expense
|
574
|
(574
|
)
|
(2)
|
|
-
|
||||||||||
Other (income)/expense, net
|
76
|
778
|
(2),(3)
|
|
854
|
|||||||||||
Total Expenses
|
7,393
|
(64
|
)
|
7,329
|
||||||||||||
Earnings/(Loss) Before Income Taxes
|
5,552
|
-
|
5,552
|
|||||||||||||
Provision for income taxes
|
745
|
-
|
745
|
|||||||||||||
Net Earnings/(Loss)
|
4,807
|
-
|
4,807
|
|||||||||||||
Noncontrolling Interest
|
-
|
-
|
-
|
|||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
|
$
|
4,807
|
$
|
-
|
$
|
4,807
|
(a)
|
Excludes amortization of acquired intangible assets.
|
(1)
|
Reclassification of gain on foreign currency cash flow hedges ($64 million) from ‘‘Net product sales’’ to ‘‘Cost of products sold.’’
|
(2)
|
Reclassification of ‘‘Acquisition related charges and restructuring, net’’ ($245 million), ‘‘Interest and investment income, net’’ ($117 million), and
‘‘Interest expense’’ ($574 million) to ‘‘Other (income)/expense, net.’’
|
(3)
|
Reclassification of legal settlements ($76 million) from “Marketing, selling and administrative” to “Other (income)/expense, net”.
|
(4)
|
Reclassification of certain expenses between “Cost of products sold” ($22 million decrease),“Marketing, selling and administrative” ($66 million decrease) and
“Research and development” ($88 million increase).
|
Celgene before
reclassification
|
Reclassification
|
Notes
|
Celgene after
reclassification
|
|||||||||||||
Net product sales
|
$
|
15,265
|
$
|
10
|
|
(1)
|
|
$
|
15,275
|
|||||||
Alliance and other revenues
|
16
|
-
|
16
|
|||||||||||||
Total Revenues
|
15,281
|
10
|
15,291
|
|||||||||||||
Cost of products sold (a)
|
587
|
(18
|
)
|
(1),(4)
|
|
569
|
||||||||||
Marketing, selling and administrative
|
3,250
|
(207
|
)
|
(3),(4)
|
|
3,043
|
||||||||||
Research and development
|
5,673
|
138
|
(4)
|
|
5,811
|
|||||||||||
Amortization of acquired intangible assets
|
468
|
-
|
468
|
|||||||||||||
Acquisition related charges and restructuring, net
|
112
|
(112
|
)
|
(2)
|
|
-
|
||||||||||
Interest and investment income, net
|
(45
|
)
|
45
|
(2)
|
|
-
|
||||||||||
Interest expense
|
741
|
(741
|
)
|
(2)
|
|
-
|
||||||||||
Other (income)/expense, net
|
(337
|
)
|
905
|
(2),(3)
|
|
568
|
||||||||||
Total Expenses
|
10,449
|
10
|
10,459
|
|||||||||||||
Earnings/(Loss) Before Income Taxes
|
4,832
|
-
|
4,832
|
|||||||||||||
Provision for income taxes
|
786
|
-
|
786
|
|||||||||||||
Net Earnings/(Loss)
|
4,046
|
-
|
4,046
|
|||||||||||||
Noncontrolling Interest
|
-
|
-
|
-
|
|||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
|
$
|
4,046
|
$
|
-
|
$
|
4,046
|
(a)
|
Excludes amortization of acquired intangible assets.
|
(1)
|
Reclassification of loss on foreign currency cash flow hedges ($10 million) from ‘‘Net product sales’’ to ‘‘Cost of products sold.’’
|
(2)
|
Reclassification of ‘‘Acquisition related charges and restructuring, net’’ ($112 million), ‘‘Interest and investment income, net’’ ($45
million), and ‘‘Interest expense’’ ($741 million) to ‘‘Other (income)/expense, net.’’
|
(3)
|
Reclassification of legal settlements ($97 million) from “Marketing, selling and administrative” to “Other (income)/expense, net”.
|
(4)
|
Reclassification of certain expenses between “Cost of products sold” ($28 million decrease), “Marketing, selling and administrative” ($110 million decrease) and
“Research and development” ($138 million increase).
|
Note 6.
|
Estimate of consideration transferred in the Celgene merger and preliminary purchase price allocation
|
Celgene shares outstanding at November 19, 2019 (millions)
|
714.9
|
|||
Cash per share
|
$
|
50.00
|
||
Cash consideration for outstanding shares
|
$
|
35,745
|
||
Celgene shares outstanding at November 19, 2019 (millions)
|
714.9
|
|||
Exchange ratio
|
1.00
|
|||
Equivalent Bristol-Myers Squibb shares (millions)
|
714.9
|
|||
Closing price of Bristol-Myers Squibb common stock on November 19, 2019
|
$
|
56.48
|
||
Estimated fair value of share consideration
|
$
|
40,378
|
||
Celgene shares outstanding at November 19, 2019 (millions)
|
714.9
|
|||
Exchange ratio
|
1.00
|
|||
Equivalent CVRs (millions)
|
714.9
|
|||
Closing price of CVR (b)
|
$
|
2.30
|
||
Fair value of CVRs
|
$
|
1,644
|
||
Fair value of replacement options (a)
|
$
|
1,428
|
||
Fair value of replacement restricted share awards (a)
|
$
|
987
|
||
Fair value of CVRs issued to option and share award holders (a)
|
$
|
87
|
||
Fair value of share-based compensation awards attributable to pre-combination service
|
$
|
2,502
|
||
Total consideration transferred
|
$
|
80,269
|
(a)
|
The fair value of the replacement equity awards issued by Bristol-Myers Squibb was determined as of the closing date of the Celgene merger. The fair value of
the awards attributed to pre-combination services of $2,502 million was included in the consideration transferred and the fair value of the awards attributed to post-combination services will be included in Bristol-Myers Squibb’s
post-combination financial statements as compensation costs.
|
(b)
|
The closing price of CVR is based on the first trade on November 21, 2019.
|
Cash and cash equivalents
|
$
|
9,439
|
|||
Receivables
|
2,620
|
||||
Inventories
|
(a)
|
3,562
|
|||
Property, plant and equipment
|
(b)
|
1,353
|
|||
Other intangible assets
|
(c)
|
64,032
|
|||
Other assets
|
(a)
|
3,768
|
|||
Otezla assets held for sale
|
(d)
|
13,400
|
|||
Accounts payable
|
(421
|
)
|
|||
Deferred income taxes
|
(e)
|
(9,236
|
)
|
||
Other liabilities
|
(6,101
|
)
|
|||
Debt
|
(f)
|
(21,872
|
)
|
||
Goodwill
|
(g)
|
19,725
|
|||
Total consideration transferred
|
$
|
80,269
|
(a) |
A preliminary fair value estimate of $4,540 million ($3,562 million classified within inventories and $978 million classified within other non-current assets) has been assigned
to inventories acquired, excluding Otezla inventory which is classified as held for sale. The pro forma fair value adjustment to inventories is based on the book value of Celgene’s inventories as of September 30, 2019, adjusted as
follows:
|
|
• |
Finished goods are valued at the estimated selling prices less the sum of the costs of disposal and a reasonable profit margin for the selling effort;
|
|
• |
Work in process is valued at the estimated selling prices upon completion less the sum of costs to complete the manufacturing of the relevant product, costs of disposal and a
reasonable profit margin for the completion and selling effort; and
|
•
|
Raw materials are valued at estimated current replacement costs.
|
(b) |
A preliminary fair value estimate of $1,353 million has been assigned to property, plant and equipment acquired, primarily consisting of buildings, machinery and equipment,
computer equipment and construction in progress.
|
(c) |
A preliminary fair value estimate of $64,032 million has been assigned to identifiable intangible assets acquired, consisting of currently marketed product rights, IPR&D,
and capitalized software, excluding the Otezla intangible asset which is classified as held for sale.
|
Estimated
fair value
|
Weighted
average
estimated
useful life
|
|||||||
Currently marketed product rights
|
$
|
44,470
|
5.1
|
|||||
IPR&D*
|
19,500
|
N/A
|
||||||
Capitalized software
|
62
|
2.0
|
||||||
Total
|
$
|
64,032
|
|
* |
Acquired IPR&D assets are initially recognized at fair value and are classified as indefinite-lived assets until the successful completion or abandonment of the associated
research and development efforts. Accordingly, during the research and development period after the closing date of the combination, these assets will not be amortized into earnings; instead these assets will be subject to periodic
impairment testing. Upon successful completion of the development process for an acquired IPR&D project, determination as to the useful life of the asset will be made; at that point in time, the asset would then be considered a
finite-lived intangible asset and Bristol-Myers Squibb would begin to amortize the asset into earnings.
|
(d) |
The preliminary fair value estimate of the Otezla disposal group, which is classified as held for sale upon close of the Celgene merger and consists primarily of the intangible
product right and inventories, is $13,400 million based on the cash purchase price pursuant to the asset purchase agreement entered into with Amgen Inc.
|
(e) |
Represents the preliminary estimate of deferred income taxes primarily resulting from the fair value adjustments for inventory, identifiable intangible assets, and debt as well
as the replacement options and share awards issued. This estimate was determined based on weighted-average statutory tax rates in effect during the periods presented. This estimate of deferred income taxes is preliminary and is subject
to change based upon Bristol-Myers Squibb’s final determination of the fair values of assets acquired and liabilities assumed and the statutory tax rates in the jurisdictions where the assets and liabilities driving taxable income are
generated.
|
(f) |
The preliminary fair value estimate of $21,872 million has been assigned to Celgene’s outstanding indebtedness assumed as part of the Celgene merger, derived from closing
prices for such indebtedness as of September 30, 2019.
|
(g) |
The preliminary estimate of goodwill arising from the combination is $19,725 million. Goodwill is calculated as the difference between the fair value of the consideration
transferred and the fair values assigned to the assets acquired and liabilities assumed. Goodwill represents the going-concern value associated with future product discovery beyond the existing pipeline and the expected value of
synergies not attributed to identifiable assets.
|
Note 7.
|
Pro forma adjustments to the unaudited pro forma condensed combined balance sheet in connection with the Celgene
merger
|
|
• |
Remaining costs expected to be incurred by Bristol-Myers Squibb ($149 million), net of estimated related taxes ($17 million) are reflected as a reduction of retained earnings
in the unaudited pro forma condensed combined balance sheet.
|
|
• |
Remaining costs expected to be incurred by Celgene ($165 million), net of estimated related taxes ($19 million) are reflected as a reduction of the historical book value of
Celgene’s net assets in the unaudited pro forma condensed combined balance sheet.
|
Note 8.
|
Pro forma adjustments to the unaudited pro forma condensed combined statements of earnings in connection with the
Celgene merger
|
|
(i) |
include an estimate of intangible asset amortization based on the straight-line method and an estimated weighted average useful life of 5.1 years for acquired definite-lived
intangible assets of $6,781 million for the nine-months ended September 30, 2019 and $9,041 million for the year ended December 31, 2018; and
|
(ii)
|
eliminate Celgene’s historical intangible asset amortization expense of $343 million for the nine-months ended September 30, 2019 ($16 million within ‘‘Cost of
products sold’’ and $327 million within ‘‘Amortization of acquired intangible assets”) and $474 million for the year ended December 31, 2018 ($5 million within ‘‘Cost of products sold’’ and $469 million within ‘‘Amortization of acquired
intangible assets’’); and
|
(iii)
|
eliminate Celgene’s pro forma intangible asset amortization for Juno’s acquired definite-lived intangible assets ($14 million within “Amortization of acquired
intangible assets”) and Juno’s historical intangible asset amortization ($2 million within ‘‘Research and development’’) for the period from January 1, 2018 through March 5, 2018. Refer to ‘‘Note 12. Pro forma adjustments to the unaudited
pro forma condensed combined statement of earnings in connection with the Juno acquisition and financing’’ for more information.
|
Note 9.
|
Otezla divestiture
|
Note 10.
|
Historical Juno
|
Juno before
reclassification
|
Reclassification
|
Notes
|
Juno after
reclassification
|
|||||||||||||
Net product sales
|
$
|
-
|
$
|
-
|
$
|
-
|
||||||||||
Alliance and other revenues
|
28
|
-
|
28
|
|||||||||||||
Total Revenues
|
28
|
-
|
28
|
|||||||||||||
Cost of products sold (a)
|
-
|
-
|
-
|
|||||||||||||
Marketing, selling and administrative
|
99
|
(70
|
)
|
(1)
|
|
29
|
||||||||||
Research and development
|
94
|
(15
|
)
|
(1)
|
|
79
|
||||||||||
Interest income, net
|
(2
|
)
|
2
|
(2)
|
|
-
|
||||||||||
Other (income)/expense, net
|
(1
|
)
|
83
|
(1),(2)
|
|
82
|
||||||||||
Total Expenses
|
190
|
-
|
190
|
|||||||||||||
Earnings/(Loss) Before Income Taxes
|
(162
|
)
|
-
|
(162
|
)
|
|||||||||||
Provision for income taxes
|
-
|
-
|
-
|
|||||||||||||
Net Earnings/(Loss)
|
(162
|
)
|
-
|
(162
|
)
|
|||||||||||
Noncontrolling Interest
|
-
|
-
|
-
|
|||||||||||||
Net Earnings/(Loss) Attributable to Controlling Interests
|
$
|
(162
|
)
|
$
|
-
|
$
|
(162
|
)
|
(a)
|
Excludes amortization of acquired intangible assets.
|
(1) |
Reclassification of transaction costs from ‘‘Marketing, selling and administrative’’ ($70 million) and ‘‘Research and development’’ ($15 million) to ‘‘Other (income)/expense,
net.’’
|
(2)
|
Reclassification of ‘‘Interest income, net’’ ($2 million) to ‘‘Other (income)/expense, net.’’
|
Note 11.
|
Fair value of consideration transferred in the Juno acquisition and purchase price allocation
|
Cash paid for outstanding common stock at $87.00 per share
|
$
|
9,101
|
||
Fair value of Celgene’s investment in Juno
|
966
|
|||
Fair value of Juno’s equity awards attributable to pre-combination service
|
367
|
|||
Purchase price consideration
|
$
|
10,434
|
Working capital (a)
|
$
|
452
|
||
In-process research and development (IPR&D)
|
6,980
|
|||
Definite-lived intangible asset
|
1,260
|
|||
Property, plant and equipment, net
|
144
|
|||
Other non-current assets
|
32
|
|||
Deferred tax liabilities, net
|
(1,530
|
)
|
||
Other non-current liabilities
|
(41
|
)
|
||
Goodwill
|
3,137
|
|||
Total allocated purchase price consideration
|
$
|
10,434
|
(a) |
Includes cash and cash equivalents, debt securities available-for-sale, accounts receivable, net of allowances, other current assets, accounts payable, accrued expenses and
other current liabilities (including accrued litigation).
|
Note 12.
|
Pro forma adjustments to the unaudited pro forma condensed combined statement of earnings in connection with the Juno acquisition and
financing
|