INDIANA | 35-0470950 | |
(State or other jurisdiction of | (I.R.S. Employer | |
incorporation or organization) | Identification No.) |
Large accelerated filer ý | Accelerated filer o | |||||
Non-accelerated filer o | Smaller reporting company o | |||||
Emerging growth company o |
Class | Number of Shares Outstanding | ||
Common | 1,059,322,255 |
Page | ||||
• | the timing of anticipated regulatory approvals and launches of new products; |
• | market uptake of recently launched products; |
• | competitive developments affecting current products; |
• | the expiration of intellectual property protection for certain of our products; |
• | our ability to protect and enforce patents and other intellectual property; |
• | the impact of actions of governmental and private payers affecting pricing of, reimbursement for, and access to pharmaceuticals; |
• | regulatory compliance problems or government investigations; |
• | regulatory actions regarding currently marketed products; |
• | unexpected safety or efficacy concerns associated with our products; |
• | issues with product supply stemming from manufacturing difficulties or disruptions; |
• | regulatory changes or other developments; |
• | changes in patent law or regulations related to data-package exclusivity; |
• | litigation involving past, current, or future products as we are largely self-insured; |
• | unauthorized disclosure or misappropriation of trade secrets or other confidential data stored in our information systems, networks, and facilities, or those of third parties with whom we share our data; |
• | changes in tax law; |
• | changes in foreign currency exchange rates, interest rates, and inflation; |
• | asset impairments and restructuring charges; |
• | changes in accounting standards promulgated by the Financial Accounting Standards Board and the Securities and Exchange Commission (SEC); |
• | acquisitions and business development transactions and related integration costs; |
• | information technology system inadequacies or operating failures; |
• | reliance on third-party relationships and outsourcing arrangements; |
• | the impact of global macroeconomic conditions; and |
• | uncertainties and risks related to timing and potential value to both Elanco and Lilly of the planned separation of the Elanco animal health business, including business, industry, and market risks, as well as risks involving realizing the anticipated tax-free nature of the separation. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 6,061.9 | $ | 5,658.0 | $ | 18,117.1 | $ | 16,710.6 | |||||||
Costs, expenses, and other: | |||||||||||||||
Cost of sales | 1,562.3 | 1,586.3 | 4,836.3 | 4,505.9 | |||||||||||
Research and development | 1,343.3 | 1,340.0 | 3,853.3 | 3,870.4 | |||||||||||
Marketing, selling, and administrative | 1,616.6 | 1,578.5 | 4,770.3 | 4,876.6 | |||||||||||
Acquired in-process research and development (Note 3) | 30.0 | 205.0 | 1,654.5 | 1,062.6 | |||||||||||
Asset impairment, restructuring, and other special charges (Note 5) | 83.3 | 406.5 | 236.0 | 670.4 | |||||||||||
Other–net, (income) expense (Note 11) | 15.4 | (49.9 | ) | (90.1 | ) | (188.6 | ) | ||||||||
4,650.9 | 5,066.4 | 15,260.3 | 14,797.3 | ||||||||||||
Income before income taxes | 1,411.0 | 591.6 | 2,856.8 | 1,913.3 | |||||||||||
Income taxes (Note 7) | 261.5 | 36.0 | 749.8 | 460.5 | |||||||||||
Net income | $ | 1,149.5 | $ | 555.6 | $ | 2,107.0 | $ | 1,452.8 | |||||||
Earnings per share: | |||||||||||||||
Basic | $ | 1.13 | $ | 0.53 | $ | 2.04 | $ | 1.38 | |||||||
Diluted | $ | 1.12 | $ | 0.53 | $ | 2.03 | $ | 1.37 | |||||||
Shares used in calculation of earnings per share: | |||||||||||||||
Basic | 1,020.4 | 1,053.4 | 1,033.2 | 1,054.8 | |||||||||||
Diluted | 1,026.3 | 1,056.0 | 1,037.8 | 1,057.0 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net income | $ | 1,149.5 | $ | 555.6 | $ | 2,107.0 | $ | 1,452.8 | |||||||
Other comprehensive income, net of tax (Note 10) (1) | 660.2 | 167.7 | 375.3 | 651.2 | |||||||||||
Comprehensive income | $ | 1,809.7 | $ | 723.3 | $ | 2,482.3 | $ | 2,104.0 |
September 30, 2018 | December 31, 2017 | ||||||
Assets | (Unaudited) | ||||||
Current Assets | |||||||
Cash and cash equivalents (Note 6) | $ | 8,960.0 | $ | 6,536.2 | |||
Short-term investments (Note 6) | 76.1 | 1,497.9 | |||||
Accounts receivable, net of allowances of $34.0 (2018) and $38.7 (2017) | 4,859.4 | 4,546.3 | |||||
Other receivables | 793.2 | 715.9 | |||||
Inventories | 4,118.0 | 4,458.3 | |||||
Prepaid expenses and other | 1,879.2 | 1,447.5 | |||||
Total current assets | 20,685.9 | 19,202.1 | |||||
Other Assets | |||||||
Investments (Note 6) | 2,005.8 | 5,678.8 | |||||
Goodwill | 4,358.4 | 4,370.1 | |||||
Other intangibles | 3,619.4 | 4,029.2 | |||||
Deferred tax assets | 3,132.3 | 1,166.4 | |||||
Sundry | 2,009.2 | 1,707.9 | |||||
Total other assets | 15,125.1 | 16,952.4 | |||||
Property and equipment, net of accumulated depreciation of $9,671.7 (2018) and $9,264.6 (2017) | 8,814.1 | 8,826.5 | |||||
Total assets | $ | 44,625.1 | $ | 44,981.0 | |||
Liabilities and Equity | |||||||
Current Liabilities | |||||||
Short-term borrowings and current maturities of long-term debt | $ | 1,002.2 | $ | 3,706.6 | |||
Accounts payable | 1,281.2 | 1,410.7 | |||||
Employee compensation | 858.5 | 997.9 | |||||
Sales rebates and discounts | 5,129.4 | 4,465.1 | |||||
Dividends payable | — | 590.6 | |||||
Income taxes payable | 409.2 | 532.9 | |||||
Other current liabilities | 2,146.2 | 2,832.1 | |||||
Total current liabilities | 10,826.7 | 14,535.9 | |||||
Other Liabilities | |||||||
Long-term debt | 11,674.7 | 9,940.5 | |||||
Accrued retirement benefits (Note 8) | 2,684.5 | 3,513.9 | |||||
Long-term income taxes payable | 3,740.5 | 3,776.5 | |||||
Other noncurrent liabilities | 1,547.8 | 1,546.3 | |||||
Total other liabilities | 19,647.5 | 18,777.2 | |||||
Commitments and Contingencies (Note 9) | |||||||
Eli Lilly and Company Shareholders’ Equity | |||||||
Common stock | 667.1 | 687.9 | |||||
Additional paid-in capital | 6,522.9 | 5,817.8 | |||||
Retained earnings | 14,408.7 | 13,894.1 | |||||
Employee benefit trust | (3,013.2 | ) | (3,013.2 | ) | |||
Accumulated other comprehensive loss (Note 10) | (5,439.5 | ) | (5,718.6 | ) | |||
Cost of common stock in treasury | (69.4 | ) | (75.8 | ) | |||
Total Eli Lilly and Company shareholders’ equity | 13,076.6 | 11,592.2 | |||||
Noncontrolling interests (Note 3) | 1,074.3 | 75.7 | |||||
Total equity | 14,150.9 | 11,667.9 | |||||
Total liabilities and equity | $ | 44,625.1 | $ | 44,981.0 |
Equity of Eli Lilly and Company Shareholders | |||||||||||||||||||||||||||||||||
ELI LILLY AND COMPANY AND SUBSIDIARIES (Dollars in millions, shares in thousands) | Common Stock | Additional Paid-in Capital | Retained Earnings | Employee Benefit Trust | Accumulated Other Comprehensive Loss | Common Stock in Treasury | Noncontrolling Interest | ||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
Balance at July 1, 2017 | 1,101,646 | $ | 688.5 | $ | 5,686.1 | $ | 15,590.1 | $ | (3,013.2 | ) | $ | (4,774.9 | ) | 664 | $ | (75.8 | ) | $ | 68.9 | ||||||||||||||
Net income | 555.6 | 0.3 | |||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 165.5 | 2.2 | |||||||||||||||||||||||||||||||
Issuance of stock under employee stock plans, net | 26 | (1.2 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation | 69.8 | ||||||||||||||||||||||||||||||||
Other | (0.2 | ) | (1.1 | ) | |||||||||||||||||||||||||||||
Balance at September 30, 2017 | 1,101,672 | $ | 688.5 | $ | 5,754.7 | $ | 16,145.5 | $ | (3,013.2 | ) | $ | (4,609.4 | ) | 664 | $ | (75.8 | ) | $ | 70.3 | ||||||||||||||
Balance at July 1, 2018 | 1,077,548 | $ | 673.5 | $ | 5,825.7 | $ | 14,247.3 | $ | (3,013.2 | ) | $ | (6,108.7 | ) | 604 | $ | (69.4 | ) | $ | 65.6 | ||||||||||||||
Net income (loss) | 1,149.5 | (5.2 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 660.2 | ||||||||||||||||||||||||||||||||
Retirement of treasury shares | (10,191 | ) | (6.4 | ) | (993.7 | ) | (10,191 | ) | 1,000.0 | ||||||||||||||||||||||||
Purchase of treasury shares (1) | 10,191 | (1,000.0 | ) | ||||||||||||||||||||||||||||||
Issuance of stock under employee stock plans, net | 17 | (0.5 | ) | ||||||||||||||||||||||||||||||
Stock-based compensation | 68.5 | ||||||||||||||||||||||||||||||||
Sale of Elanco stock (Note 3) | 629.2 | 9.0 | 1,017.2 | ||||||||||||||||||||||||||||||
Other | 5.6 | (3.3 | ) | ||||||||||||||||||||||||||||||
Balance at September 30, 2018 | 1,067,374 | $ | 667.1 | $ | 6,522.9 | $ | 14,408.7 | $ | (3,013.2 | ) | $ | (5,439.5 | ) | 604 | $ | (69.4 | ) | $ | 1,074.3 |
Equity of Eli Lilly and Company Shareholders | |||||||||||||||||||||||||||||||||
ELI LILLY AND COMPANY AND SUBSIDIARIES (Dollars in millions, shares in thousands) | Common Stock | Additional Paid-in Capital | Retained Earnings | Employee Benefit Trust | Accumulated Other Comprehensive Loss | Common Stock in Treasury | Noncontrolling Interest | ||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||
Balance at January 1, 2017 | 1,101,586 | $ | 688.5 | $ | 5,640.6 | $ | 16,046.3 | $ | (3,013.2 | ) | $ | (5,274.0 | ) | 711 | $ | (80.5 | ) | $ | 72.8 | ||||||||||||||
Net income | 1,452.8 | 14.3 | |||||||||||||||||||||||||||||||
Other comprehensive income (loss), net of tax | 664.6 | (13.4 | ) | ||||||||||||||||||||||||||||||
Cash dividends declared per share: $1.04 | (1,095.7 | ) | |||||||||||||||||||||||||||||||
Retirement of treasury shares | (3,191 | ) | (2.0 | ) | (257.9 | ) | (3,191 | ) | 259.9 | ||||||||||||||||||||||||
Purchase of treasury shares | 60.0 | 3,191 | (259.9 | ) | |||||||||||||||||||||||||||||
Issuance of stock under employee stock plans, net | 3,277 | 2.0 | (155.0 | ) | (47 | ) | 4.7 | ||||||||||||||||||||||||||
Stock-based compensation | 209.1 | ||||||||||||||||||||||||||||||||
Other | (3.4 | ) | |||||||||||||||||||||||||||||||
Balance at September 30, 2017 | 1,101,672 | $ | 688.5 | $ | 5,754.7 | $ | 16,145.5 | $ | (3,013.2 | ) | $ | (4,609.4 | ) | 664 | $ | (75.8 | ) | $ | 70.3 | ||||||||||||||
Balance at January 1, 2018 | 1,100,672 | $ | 687.9 | $ | 5,817.8 | $ | 13,894.1 | $ | (3,013.2 | ) | $ | (5,718.6 | ) | 664 | $ | (75.8 | ) | $ | 75.7 | ||||||||||||||
Net income (loss) | 2,107.0 | (0.6 | ) | ||||||||||||||||||||||||||||||
Other comprehensive income, net of tax | 375.3 | ||||||||||||||||||||||||||||||||
Cash dividends declared per share: $1.13 | (1,148.6 | ) | |||||||||||||||||||||||||||||||
Retirement of treasury shares | (36,014 | ) | (22.5 | ) | (3,028.2 | ) | (36,014 | ) | 3,050.7 | ||||||||||||||||||||||||
Purchase of treasury shares (1) | 36,014 | (3,050.7 | ) | ||||||||||||||||||||||||||||||
Issuance of stock under employee stock plans, net | 2,716 | 1.7 | (130.8 | ) | (60 | ) | 6.4 | ||||||||||||||||||||||||||
Stock-based compensation | 206.7 | ||||||||||||||||||||||||||||||||
Adoption of new accounting standards (Note 2) | 2,584.4 | (105.2 | ) | ||||||||||||||||||||||||||||||
Sale of Elanco stock (Note 3) | 629.2 | 9.0 | 1,017.2 | ||||||||||||||||||||||||||||||
Other | (18.0 | ) | |||||||||||||||||||||||||||||||
Balance at September 30, 2018 | 1,067,374 | $ | 667.1 | $ | 6,522.9 | $ | 14,408.7 | $ | (3,013.2 | ) | $ | (5,439.5 | ) | 604 | $ | (69.4 | ) | $ | 1,074.3 |
Nine Months Ended September 30, | |||||||
2018 | 2017 | ||||||
Cash Flows from Operating Activities | |||||||
Net income | $ | 2,107.0 | $ | 1,452.8 | |||
Adjustments to Reconcile Net Income to Cash Flows from Operating Activities: | |||||||
Depreciation and amortization | 1,263.5 | 1,155.4 | |||||
Change in deferred income taxes | 161.6 | 151.7 | |||||
Stock-based compensation expense | 206.7 | 209.1 | |||||
Acquired in-process research and development | 1,654.5 | 1,062.6 | |||||
Other changes in operating assets and liabilities, net of acquisitions | (1,638.2 | ) | (525.2 | ) | |||
Other non-cash operating activities, net | 320.7 | 365.7 | |||||
Net Cash Provided by Operating Activities | 4,075.8 | 3,872.1 | |||||
Cash Flows from Investing Activities | |||||||
Net purchases of property and equipment | (816.3 | ) | (633.3 | ) | |||
Proceeds from sales and maturities of short-term investments | 2,535.5 | 2,320.2 | |||||
Purchases of short-term investments | (112.2 | ) | (2,973.8 | ) | |||
Proceeds from sales of noncurrent investments | 3,444.7 | 1,686.9 | |||||
Purchases of noncurrent investments | (719.7 | ) | (3,739.6 | ) | |||
Cash paid for acquisitions, net of cash acquired (Note 3) | — | (882.1 | ) | ||||
Purchase of in-process research and development (Note 3) | (1,578.2 | ) | (1,036.8 | ) | |||
Other investing activities, net | (188.8 | ) | (178.0 | ) | |||
Net Cash Provided by (Used for) Investing Activities | 2,565.0 | (5,436.5 | ) | ||||
Cash Flows from Financing Activities | |||||||
Dividends paid | (1,739.2 | ) | (1,643.8 | ) | |||
Net change in short-term borrowings | (2,297.1 | ) | 1,226.8 | ||||
Proceeds from issuance of long-term debt | 2,477.7 | 2,232.0 | |||||
Repayments of long-term debt | (1,001.5 | ) | (630.6 | ) | |||
Purchases of common stock | (3,050.7 | ) | (199.9 | ) | |||
Net proceeds from Elanco initial public offering (Note 3) | 1,659.7 | — | |||||
Other financing activities, net | (314.1 | ) | (299.6 | ) | |||
Net Cash Provided by (Used for) Financing Activities | (4,265.2 | ) | 684.9 | ||||
Effect of exchange rate changes on cash and cash equivalents | 48.2 | 21.7 | |||||
Net increase (decrease) in cash and cash equivalents | 2,423.8 | (857.8 | ) | ||||
Cash and cash equivalents at January 1 | 6,536.2 | 4,582.1 | |||||
Cash and Cash Equivalents at September 30 | $ | 8,960.0 | $ | 3,724.3 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net product revenue | $ | 5,664.5 | $ | 5,323.8 | $ | 16,905.6 | $ | 15,841.5 | |||||||
Collaboration and other revenue (1) | 397.4 | 334.2 | 1,211.5 | 869.1 | |||||||||||
Revenue | $ | 6,061.9 | $ | 5,658.0 | $ | 18,117.1 | $ | 16,710.6 |
• | Most of our pharmaceutical products are sold to wholesalers that serve pharmacies, physicians and other health care professionals, and hospitals. Most of our animal health products are sold to wholesale distributors. We initially invoice our customers at contractual list prices. Contracts with direct and indirect customers may provide for various rebates and discounts that may differ in each contract. As a consequence, to determine the appropriate transaction price for our product sales at the time we recognize a sale to a direct customer, we must estimate any rebates or discounts that ultimately will be due to the direct customer and other customers in the distribution chain under the terms of our contracts. Significant judgments are required in making these estimates. |
• | The rebate and discount amounts are recorded as a deduction to arrive at our net product revenue. Sales rebates and discounts that require the use of judgment in the establishment of the accrual include managed care, Medicare, Medicaid, chargebacks, long-term care, hospital, patient assistance programs, and various other programs. We estimate these accruals using an expected value approach. |
• | The largest of our sales rebate and discount amounts are rebates associated with sales covered by managed care, Medicare, Medicaid, and chargeback contracts in the U.S. In determining the appropriate accrual amount, we consider our historical rebate payments for these programs by product as a percentage of our historical sales as well as any significant changes in sales trends (e.g., patent expiries and product launches), an evaluation of the current contracts for these programs, the percentage of our products that are sold via these programs, and our product pricing. Although we accrue a liability for rebates related to these programs at the time we record the sale, the rebate related to that sale is typically paid up to six months later. Because of this time lag, in any particular period our rebate adjustments may incorporate revisions of accruals for several periods. |
• | Most of our rebates outside the U.S. are contractual or legislatively mandated and are estimated and recognized in the same period as the related sales. In some large European countries, government rebates are based on the anticipated budget for pharmaceutical payments in the country. An estimate of these rebates, updated as governmental authorities revise budgeted deficits, is recognized in the same period as the related sale. |
• | When product sales occur, to determine the appropriate transaction price for our sales, we estimate a reserve for future product returns related to those sales using an expected value approach. This estimate is based on several factors, including: historical return rates, expiration date by product (on average, approximately 24 months after the initial sale of a product to our customer), and estimated levels of inventory in the wholesale and retail channels, as well as any other specifically-identified anticipated returns due to known factors such as the loss of patent exclusivity, product recalls and discontinuances, or a changing competitive environment. We maintain a returns policy that allows U.S. pharmaceutical customers to return product for dating issues within a specified period prior to and subsequent to the product's expiration date. Following the loss of exclusivity for a patent-dependent product, we expect to experience an elevated level of product returns as product inventory remaining in the wholesale and retail channels expires. Adjustments to the returns reserve have been and may in the future be required based on revised estimates to our assumptions. We record the return amounts as a deduction to arrive at our net product revenue. Once the product is returned, it is destroyed; we do not record a right of return asset. Our returns policies outside the U.S. are generally more restrictive than in the U.S. as returns are not allowed for reasons other than failure to meet product specifications in many countries. Our reserve for future product returns for product sales outside the U.S. is not material. |
• | As a part of our process to estimate a reserve for product returns, we regularly review the supply levels of our significant products sold to major wholesalers in the U.S. and in major markets outside the U.S., primarily by reviewing periodic inventory reports supplied by our major wholesalers and available prescription volume information for our products, or alternative approaches. We attempt to maintain U.S. wholesaler inventory levels at an average of approximately one month or less on a consistent basis across our product portfolio. Causes of unusual wholesaler buying patterns include actual or anticipated product-supply issues, weather patterns, anticipated changes in the transportation network, redundant holiday stocking, and changes in wholesaler business operations. In the U.S., the current structure of our arrangements provides us with data on inventory levels at our wholesalers; however, our data on inventory levels in the retail channel is more limited. Wholesaler stocking and destocking activity historically has not caused any material changes in the rate of actual product returns. |
• | Actual product returns have been less than 2 percent of our net revenue over each of the past three years and have not fluctuated significantly as a percentage of revenue, although fluctuations are more likely in periods following loss of patent exclusivity for major products in the U.S. market. |
• | Revenue related to products we sell pursuant to these arrangements is included in net product revenue, while other sources of revenue (e.g., royalties and profit sharing from our partner) are included in collaboration and other revenue. |
• | Initial fees and developmental milestones we receive in collaborative and other similar arrangements from the partnering of our compounds under development are generally deferred and amortized into income through the expected product approval date. |
• | Profit-sharing due from our collaboration partners, which is based upon gross margins reported to us by our partners, is recognized as collaboration and other revenue as earned. |
• | Royalty revenue from licensees, which is based on sales to third parties of licensed products and technology, is recorded when the third-party sale occurs and the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). This royalty revenue is included in collaboration and other revenue. |
• | For arrangements involving multiple goods or services (e.g., research and development, marketing and selling, manufacturing, and distribution), each required good or service is evaluated to determine whether it is distinct. If a good or service does not qualify as distinct, it is combined with the other non-distinct goods or services within the arrangement and these combined goods or services are treated as a single performance obligation for accounting purposes. The arrangement's transaction price is then allocated to each performance obligation based on the relative standalone selling price of each performance obligation. For arrangements that involve variable consideration where we have sold intellectual property, we recognize revenue based on estimates of the amount of consideration we believe we will be entitled to receive from the other party, subject to a constraint. These estimates are adjusted to reflect the actual amounts to be collected when those facts and circumstances become known. |
• | Significant judgments must be made in determining the transaction price for our sales of intellectual property. Because of the risk that products in development will not receive regulatory approval, we generally do not recognize any contingent payments that would be due to us upon or after regulatory approval. |
• | We have entered into arrangements whereby we transferred rights to products and committed to supply for a period of time. For those arrangements for which we concluded that the obligations were not distinct, any amounts received upfront are being amortized to revenue as net product revenue over the period of the supply arrangement as the performance obligation is satisfied. |
September 30, 2018 | December 31, 2017 | ||||||
Contract liabilities | $ | 308.6 | $ | 335.2 |
• | The remaining license period of symbolic intellectual property, and |
• | Obligations to supply product for a defined period of time. |
Standard | Description | Effect on the financial statements or other significant matters | ||
Accounting Standards Update 2014-09 and various other related updates, Revenue from Contracts with Customers | This standard replaced existing revenue recognition standards and requires entities to recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity can apply the new revenue standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. We applied the latter approach. | Application of the new standard to applicable contracts resulted in an increase of approximately $5 million to retained earnings as of January 1, 2018. Disclosures required by the new standard are included in Note 1, Note 4, and Note 12. | ||
Accounting Standards Update 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities | This standard requires entities to recognize changes in the fair value of equity investments with readily determinable fair values in net income (except for investments accounted for under the equity method of accounting or those that result in consolidation of the investee). An entity should apply the new standard through a cumulative effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. | Upon adoption, we reclassified from accumulated other comprehensive loss the after-tax amount of net unrealized gains resulting in an increase to retained earnings of approximately $105 million. Adoption of this standard did not result in a material change in net income for the three and nine months ended September 30, 2018. |
Standard | Description | Effect on the financial statements or other significant matters | ||
Accounting Standards Update 2016-16, Income Taxes: Intra-Entity Transfers of Assets Other Than Inventory | This standard requires entities to recognize the income tax consequences of intra-entity transfers of assets other than inventory at the time of transfer. This standard requires a modified retrospective approach to adoption. | Upon adoption, the cumulative effect of applying the standard resulted in an increase to deferred tax assets and retained earnings of approximately $2.5 billion. Adoption of this standard did not result in a material change in net income for the three and nine months ended September 30, 2018. | ||
Accounting Standards Update 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost | This standard was issued to improve the transparency and comparability among organizations by requiring entities to separate their net periodic pension cost and net periodic postretirement benefit cost into a service cost component and other components. Previously, the costs of the other components along with the service cost component were classified based upon the function of the employee. This standard requires entities to classify the service cost component in the same financial statement line item or items as other compensation costs arising from services rendered by pertinent employees. The other components of net benefit cost are now presented separately from the line items that include the service cost component. When applicable, the service cost component is now the only component eligible for capitalization. An entity should apply the new standard retrospectively for the classification of the service cost and other components and prospectively for the capitalization of the service cost component. | Upon adoption of this standard, pension and postretirement benefit cost components other than service costs are presented in other–net, (income) expense. The application of the new standard resulted in reclassification to other income of $63.8 million for the three months ended September 30, 2017, while increasing cost of sales by $20.2 million, marketing, selling, and administrative expenses by $23.0 million, and research and development expenses by $20.6 million for the same period. The application of the new standard resulted in reclassification to other income of $191.3 million for the nine months ended September 30, 2017, while increasing cost of sales by $60.5 million, marketing, selling, and administrative expenses by $69.0 million, and research and development expenses by $61.8 million for the same period. We do not expect application of the new standard to have a material impact on an ongoing basis. |
Standard | Description | Effective Date | Effect on the financial statements or other significant matters | |||
Accounting Standards Update 2016-02, Leases | This standard was issued to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities, including leases classified as operating leases under current GAAP, on the balance sheet and requiring additional disclosures about leasing arrangements. An entity can apply the new leases standard retrospectively to each prior reporting period presented or with the cumulative effect of initially applying the standard recognized at the date of initial application in retained earnings. We plan to use the latter approach. | This standard is effective January 1, 2019, with early adoption permitted. We intend to adopt on that date. | We are in the process of determining the impact on our consolidated financial statements. We have selected a software solution to be compatible with our enterprise software system. Development of our selected solution is ongoing, as it is not yet fully compliant with the requirements of the standard. The timely readiness of the lease software system is critical to ensure an efficient and effective adoption of the standard. |
Estimated Fair Value at January 3, 2017 | |||
Inventories | $ | 108.6 | |
Marketed products (1) | 297.0 | ||
Property and equipment | 148.2 | ||
Other assets and liabilities - net | 8.2 | ||
Total identifiable net assets | 562.0 | ||
Goodwill (2) | 320.1 | ||
Total consideration transferred - net of cash acquired | $ | 882.1 |
Counterparty | Compound(s) or Therapy | Acquisition Month | Phase of Development (1) | Acquired IPR&D Expense | ||||
Sigilon Therapeutics (Sigilon) | Encapsulated cell therapies for the potential treatment of type 1 diabetes | April 2018 | Pre-clinical | $ | 66.9 | |||
AurKa Pharma, Inc. (AurKa) | AK-01, an Aurora kinase A inhibitor | June 2018 | Phase I | 81.8 | ||||
ARMO Biosciences, Inc. (ARMO) | Cancer therapy - pegilodecakin | June 2018 | Phase III | 1,475.8 | ||||
Anima Biotech (Anima) | Translation inhibitors for selected neuroscience targets | July 2018 | Pre-clinical | 30.0 | ||||
CoLucid Pharmaceuticals, Inc. (CoLucid) | Oral therapy for the acute treatment of migraine - lasmiditan | March 2017 | Phase III | 857.6 | ||||
KeyBioscience AG (KeyBioscience) | Multiple molecules for treatment of metabolic disorders | July 2017 | Phase II | 55.0 | ||||
Nektar Therapeutics (Nektar) | Immunological therapy - NKTR-358 | August 2017 | Phase I | 150.0 |
Year Launched | Milestones (Deferred) Capitalized (1) | ||||||||||
Product Family | U.S. | Europe | Japan | Year | Amount | ||||||
Trajenta (2) | 2011 | 2011 | 2011 | Cumulative (4) - all prior to 2017 | $ | 446.4 | |||||
Jardiance (3) | 2014 | 2014 | 2015 | Cumulative (4) - all prior to 2017 | 299.5 | ||||||
Basaglar | 2016 | 2015 | 2015 | Cumulative (4) - all prior to 2017 | (250.0 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Basaglar | $ | 201.2 | $ | 145.7 | $ | 569.0 | $ | 278.3 | |||||||
Jardiance | 166.9 | 127.2 | 465.1 | 304.3 | |||||||||||
Trajenta | 135.7 | 153.3 | 418.5 | 408.2 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net product revenue | $ | 133.7 | $ | 137.6 | $ | 397.0 | $ | 403.3 | |||||||
Collaboration and other revenue | 25.8 | 25.9 | 78.5 | 73.7 | |||||||||||
Revenue | $ | 159.5 | $ | 163.5 | $ | 475.5 | $ | 477.0 |
Year | Event | Classification | Amount | ||
2016 | Regulatory submissions in the U.S. and Europe | R&D expense | $ | 55.0 | |
2017 | Regulatory approval in Europe | Intangible asset | 65.0 | ||
Regulatory approval in Japan | Intangible asset | 15.0 | |||
Began Phase III testing for atopic dermatitis | R&D expense | 30.0 | |||
2018 | Regulatory approval in the U.S. | Intangible asset | 100.0 | ||
Began Phase III testing for SLE | R&D Expense | 20.0 |
Territory | Marketing Rights | Selling Party | ||
U.S. | Co-promotion | Lilly | ||
Major European markets | Co-promotion | Daiichi Sankyo | ||
Japan | Exclusive | Daiichi Sankyo |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Revenue | $ | 45.3 | $ | 55.9 | $ | 104.8 | $ | 326.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Severance: | |||||||||||||||
Human pharmaceutical products | $ | — | $ | 165.7 | $ | (24.7 | ) | $ | 277.1 | ||||||
Animal health products | (5.4 | ) | 5.8 | (0.6 | ) | 62.1 | |||||||||
Total severance | (5.4 | ) | 171.5 | (25.3 | ) | 339.2 | |||||||||
Asset impairment and other special charges: | |||||||||||||||
Human pharmaceutical products | 3.5 | 25.0 | 2.0 | 25.0 | |||||||||||
Animal health products | 85.2 | 210.0 | 259.3 | 306.2 | |||||||||||
Total asset impairment and other special charges | 88.7 | 235.0 | 261.3 | 331.2 | |||||||||||
Total asset impairment, restructuring, and other special charges | $ | 83.3 | $ | 406.5 | $ | 236.0 | $ | 670.4 |
• | Investments in companies over which we have significant influence but not a controlling interest are accounted for using the equity method, with our share of earnings or losses reported in other-net, (income) expense. |
• | For equity investments that do not have readily determinable fair values, we measure these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Any change in recorded value is recorded in other-net, (income) expense. |
• | Our public equity investments are measured and carried at fair value. Any change in fair value is recognized in other-net, (income) expense. |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Fair value hedges: | |||||||||||||||
Effect from hedged fixed-rate debt | $ | (19.6 | ) | $ | (4.0 | ) | $ | (94.1 | ) | $ | 3.6 | ||||
Effect from interest rate contracts | 19.6 | 4.0 | 94.1 | (3.6 | ) | ||||||||||
Cash flow hedges: | |||||||||||||||
Effective portion of losses on interest rate contracts reclassified from accumulated other comprehensive loss | 3.7 | 3.7 | 11.1 | 11.1 | |||||||||||
Net losses on foreign currency exchange contracts not designated as hedging instruments | 0.7 | 16.3 | 76.5 | 79.2 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Net investment hedges: | |||||||||||||||
Foreign currency-denominated notes | $ | (47.8 | ) | $ | (58.7 | ) | $ | 53.0 | $ | (332.0 | ) | ||||
Cross-currency interest rate swaps | 14.7 | (38.2 | ) | 52.3 | (95.8 | ) | |||||||||
Cash flow hedges: | |||||||||||||||
Forward-starting interest rate swaps | — | — | — | 13.0 |
Fair Value Measurements Using | |||||||||||||||||||||||
Carrying Amount | Cost (1) | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | ||||||||||||||||||
September 30, 2018 | |||||||||||||||||||||||
Cash equivalents | $ | 6,646.3 | $ | 6,646.3 | $ | 6,646.3 | $ | — | $ | — | $ | 6,646.3 | |||||||||||
Short-term investments: | |||||||||||||||||||||||
U.S. government and agency securities | $ | 10.5 | $ | 10.6 | $ | 10.5 | $ | — | $ | — | $ | 10.5 | |||||||||||
Corporate debt securities | 52.7 | 52.7 | — | 52.7 | — | 52.7 | |||||||||||||||||
Asset-backed securities | 11.5 | 11.6 | — | 11.5 | — | 11.5 | |||||||||||||||||
Other securities | 1.4 | 1.4 | — | 1.4 | — | 1.4 | |||||||||||||||||
Short-term investments | $ | 76.1 | |||||||||||||||||||||
Noncurrent investments: | |||||||||||||||||||||||
U.S. government and agency securities | $ | 152.0 | $ | 159.6 | $ | 152.0 | $ | — | $ | — | $ | 152.0 | |||||||||||
Corporate debt securities | 622.0 | 631.5 | — | 622.0 | — | 622.0 | |||||||||||||||||
Mortgage-backed securities | 109.5 | 114.1 | — | 109.5 | — | 109.5 | |||||||||||||||||
Asset-backed securities | 27.0 | 27.3 | — | 27.0 | — | 27.0 | |||||||||||||||||
Other securities | 137.4 | 39.3 | — | — | 137.4 | 137.4 | |||||||||||||||||
Marketable equity securities | 287.9 | 146.4 | 287.9 | — | — | 287.9 | |||||||||||||||||
Equity investments without readily determinable fair values (2) | 394.7 | ||||||||||||||||||||||
Equity method investments (2) | 275.3 | ||||||||||||||||||||||
Noncurrent investments | $ | 2,005.8 | |||||||||||||||||||||
December 31, 2017 | |||||||||||||||||||||||
Cash equivalents | $ | 4,763.9 | $ | 4,763.9 | $ | 4,712.4 | $ | 51.5 | $ | — | $ | 4,763.9 | |||||||||||
Short-term investments: | |||||||||||||||||||||||
U.S. government and agency securities | $ | 217.8 | $ | 218.2 | $ | 217.8 | $ | — | $ | — | $ | 217.8 | |||||||||||
Corporate debt securities | 1,182.3 | 1,183.2 | — | 1,182.3 | — | 1,182.3 | |||||||||||||||||
Asset-backed securities | 94.2 | 94.3 | — | 94.2 | — | 94.2 | |||||||||||||||||
Other securities | 3.6 | 3.6 | — | 3.6 | — | 3.6 | |||||||||||||||||
Short-term investments | $ | 1,497.9 | |||||||||||||||||||||
Noncurrent investments: | |||||||||||||||||||||||
U.S. government and agency securities | $ | 360.0 | $ | 365.0 | $ | 360.0 | $ | — | $ | — | $ | 360.0 | |||||||||||
Corporate debt securities | 3,464.3 | 3,473.5 | — | 3,464.3 | — | 3,464.3 | |||||||||||||||||
Mortgage-backed securities | 202.4 | 204.2 | — | 202.4 | — | 202.4 | |||||||||||||||||
Asset-backed securities | 653.9 | 656.0 | — | 653.9 | — | 653.9 | |||||||||||||||||
Other securities | 132.1 | 66.4 | — | — | 132.1 | 132.1 | |||||||||||||||||
Marketable equity securities | 281.3 | 131.0 | 281.3 | — | — | 281.3 | |||||||||||||||||
Cost and equity method investments (2) | 584.8 | ||||||||||||||||||||||
Noncurrent investments | $ | 5,678.8 |
Fair Value Measurements Using | |||||||||||||||||||
Carrying Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | |||||||||||||||
Short-term commercial paper borrowings | |||||||||||||||||||
September 30, 2018 | $ | (399.7 | ) | $ | — | $ | (398.4 | ) | $ | — | $ | (398.4 | ) | ||||||
December 31, 2017 | (2,696.8 | ) | — | (2,690.6 | ) | — | (2,690.6 | ) | |||||||||||
Long-term debt, including current portion | |||||||||||||||||||
September 30, 2018 | $ | (12,277.1 | ) | $ | — | $ | (12,542.2 | ) | $ | — | $ | (12,542.2 | ) | ||||||
December 31, 2017 | (10,950.3 | ) | — | (11,529.9 | ) | — | (11,529.9 | ) |
Fair Value Measurements Using | |||||||||||||||||||
Carrying Amount | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | Fair Value | |||||||||||||||
September 30, 2018 | |||||||||||||||||||
Risk-management instruments: | |||||||||||||||||||
Interest rate contracts designated as fair value hedges: | |||||||||||||||||||
Other current liabilities | $ | (2.7 | ) | $ | — | $ | (2.7 | ) | $ | — | $ | (2.7 | ) | ||||||
Other noncurrent liabilities | (66.5 | ) | — | (66.5 | ) | — | (66.5 | ) | |||||||||||
Cross-currency interest rate contracts designated as net investment hedges: | |||||||||||||||||||
Other receivables | 30.3 | — | 30.3 | — | 30.3 | ||||||||||||||
Sundry | 6.9 | — | 6.9 | — | 6.9 | ||||||||||||||
Other current liabilities | (16.6 | ) | — | (16.6 | ) | — | (16.6 | ) | |||||||||||
Foreign exchange contracts not designated as hedging instruments: | |||||||||||||||||||
Other receivables | 6.3 | — | 6.3 | — | 6.3 | ||||||||||||||
Other current liabilities | (14.0 | ) | — | (14.0 | ) | — | (14.0 | ) | |||||||||||
Contingent consideration liabilities: | |||||||||||||||||||
Other current liabilities | (62.0 | ) | — | — | (62.0 | ) | (62.0 | ) | |||||||||||
Other noncurrent liabilities | (41.4 | ) | — | — | (41.4 | ) | (41.4 | ) | |||||||||||
December 31, 2017 | |||||||||||||||||||
Risk-management instruments: | |||||||||||||||||||
Interest rate contracts designated as fair value hedges: | |||||||||||||||||||
Other receivables | $ | 0.8 | $ | — | $ | 0.8 | $ | — | $ | 0.8 | |||||||||
Sundry | 35.1 | — | 35.1 | — | 35.1 | ||||||||||||||
Other current liabilities | (0.2 | ) | — | (0.2 | ) | — | (0.2 | ) | |||||||||||
Other noncurrent liabilities | (10.5 | ) | — | (10.5 | ) | — | (10.5 | ) | |||||||||||
Cross-currency interest rate contracts designated as net investment hedges: | |||||||||||||||||||
Other current liabilities | (33.4 | ) | — | (33.4 | ) | — | (33.4 | ) | |||||||||||
Other noncurrent liabilities | (26.0 | ) | — | (26.0 | ) | — | (26.0 | ) | |||||||||||
Foreign exchange contracts not designated as hedging instruments: | |||||||||||||||||||
Other receivables | 26.8 | — | 26.8 | — | 26.8 | ||||||||||||||
Other current liabilities | (36.0 | ) | — | (36.0 | ) | — | (36.0 | ) | |||||||||||
Contingent consideration liabilities (1): | |||||||||||||||||||
Other current liabilities | (208.0 | ) | — | — | (208.0 | ) | (208.0 | ) | |||||||||||
Other noncurrent liabilities | (45.2 | ) | — | — | (45.2 | ) | (45.2 | ) |
Maturities by Period | |||||||||||||||||||
Total | Less Than 1 Year | 1-5 Years | 6-10 Years | More Than 10 Years | |||||||||||||||
Fair value of debt securities | $ | 985.1 | $ | 74.7 | $ | 620.5 | $ | 135.4 | $ | 154.5 |
September 30, 2018 | December 31, 2017 | ||||||
Unrealized gross gains | $ | 2.1 | $ | 184.7 | |||
Unrealized gross losses | 24.4 | 47.5 | |||||
Fair value of securities in an unrealized gain position | 164.0 | 1,434.2 | |||||
Fair value of securities in an unrealized loss position | 816.7 | 4,692.8 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||
Unrealized gain (loss), net | $ | (40.8 | ) | $ | (3.4 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Proceeds from sales | $ | 52.0 | $ | 951.5 | $ | 5,598.4 | $ | 3,003.0 | |||||||
Realized gross gains on sales | 0.4 | 9.0 | 8.1 | 82.9 | |||||||||||
Realized gross losses on sales | 0.7 | 0.8 | 49.7 | 3.2 |
Defined Benefit Pension Plans | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Components of net periodic benefit cost: | |||||||||||||||
Service cost | $ | 74.2 | $ | 86.0 | $ | 232.3 | $ | 251.6 | |||||||
Interest cost | 117.9 | 103.6 | 342.5 | 309.2 | |||||||||||
Expected return on plan assets | (212.7 | ) | (196.4 | ) | (636.3 | ) | (585.7 | ) | |||||||
Amortization of prior service cost | 1.1 | 1.4 | 3.6 | 4.3 | |||||||||||
Recognized actuarial loss | 79.2 | 72.5 | 261.2 | 215.6 | |||||||||||
Curtailment loss | 1.3 | — | 1.3 | — | |||||||||||
Net periodic benefit cost | $ | 61.0 | $ | 67.1 | $ | 204.6 | $ | 195.0 |
Retiree Health Benefit Plans | |||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Components of net periodic benefit income: | |||||||||||||||
Service cost | $ | 10.1 | $ | 11.6 | $ | 31.7 | $ | 34.8 | |||||||
Interest cost | 14.9 | 13.2 | 42.3 | 39.6 | |||||||||||
Expected return on plan assets | (44.8 | ) | (40.2 | ) | (132.7 | ) | (120.6 | ) | |||||||
Amortization of prior service benefit | (19.3 | ) | (22.5 | ) | (60.2 | ) | (67.5 | ) | |||||||
Recognized actuarial loss | 0.8 | 4.6 | 5.4 | 13.8 | |||||||||||
Curtailment gain | (29.3 | ) | — | (29.3 | ) | — | |||||||||
Net periodic benefit income | $ | (67.6 | ) | $ | (33.3 | ) | $ | (142.8 | ) | $ | (99.9 | ) |
(Amounts presented net of taxes) | Foreign Currency Translation Gains (Losses) | Unrealized Net Gains (Losses) on Securities | Defined Benefit Pension and Retiree Health Benefit Plans | Effective Portion of Cash Flow Hedges | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance at July 1, 2018 | $ | (1,671.5 | ) | $ | (18.1 | ) | $ | (4,190.6 | ) | $ | (228.5 | ) | $ | (6,108.7 | ) | ||||
Other comprehensive income (loss) before reclassifications | 60.6 | 1.1 | 548.6 | — | 610.3 | ||||||||||||||
Net amount reclassified from accumulated other comprehensive loss | — | (0.2 | ) | 47.2 | 2.9 | 49.9 | |||||||||||||
Net other comprehensive income (loss) | 60.6 | 0.9 | 595.8 | 2.9 | 660.2 | ||||||||||||||
Balance at September 30, 2018 (4) | $ | (1,610.9 | ) | $ | (17.2 | ) | $ | (3,594.8 | ) | $ | (225.6 | ) | $ | (5,448.5 | ) |
(Amounts presented net of taxes) | Foreign Currency Translation Gains (Losses) | Unrealized Net Gains (Losses) on Securities | Defined Benefit Pension and Retiree Health Benefit Plans | Effective Portion of Cash Flow Hedges | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance at July 1, 2017 | $ | (1,349.4 | ) | $ | 153.2 | $ | (3,348.5 | ) | $ | (197.6 | ) | $ | (4,742.3 | ) | |||||
Other comprehensive income (loss) before reclassifications | 135.8 | 33.9 | (28.7 | ) | — | 141.0 | |||||||||||||
Net amount reclassified from accumulated other comprehensive loss | 8.1 | (23.9 | ) | 40.1 | 2.4 | 26.7 | |||||||||||||
Net other comprehensive income (loss) | 143.9 | 10.0 | 11.4 | 2.4 | 167.7 | ||||||||||||||
Balance at September 30, 2017 (1) | $ | (1,205.5 | ) | $ | 163.2 | $ | (3,337.1 | ) | $ | (195.2 | ) | $ | (4,574.6 | ) |
(Amounts presented net of taxes) | Foreign Currency Translation Gains (Losses) | Unrealized Net Gains (Losses) on Securities | Defined Benefit Pension and Retiree Health Benefit Plans | Effective Portion of Cash Flow Hedges | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance at January 1, 2018 (2) | $ | (1,233.4 | ) | $ | 113.5 | $ | (4,340.7 | ) | $ | (234.3 | ) | $ | (5,694.9 | ) | |||||
Reclassification due to adoption of new accounting standard (3) | — | (128.9 | ) | — | — | (128.9 | ) | ||||||||||||
Other comprehensive income (loss) before reclassifications | (377.5 | ) | 31.0 | 581.0 | — | 234.5 | |||||||||||||
Net amount reclassified from accumulated other comprehensive loss | — | (32.8 | ) | 164.9 | 8.7 | 140.8 | |||||||||||||
Net other comprehensive income (loss) | (377.5 | ) | (1.8 | ) | 745.9 | 8.7 | 375.3 | ||||||||||||
Balance at September 30, 2018 (4) | $ | (1,610.9 | ) | $ | (17.2 | ) | $ | (3,594.8 | ) | $ | (225.6 | ) | $ | (5,448.5 | ) |
(Amounts presented net of taxes) | Foreign Currency Translation Gains (Losses) | Unrealized Net Gains (Losses) on Securities | Defined Benefit Pension and Retiree Health Benefit Plans | Effective Portion of Cash Flow Hedges | Accumulated Other Comprehensive Loss | ||||||||||||||
Balance at January 1, 2017 (2) | $ | (1,867.3 | ) | $ | 224.0 | $ | (3,371.6 | ) | $ | (210.9 | ) | $ | (5,225.8 | ) | |||||
Other comprehensive income (loss) before reclassifications | 653.7 | 9.6 | (83.3 | ) | 8.4 | 588.4 | |||||||||||||
Net amount reclassified from accumulated other comprehensive loss | 8.1 | (70.4 | ) | 117.8 | 7.3 | 62.8 | |||||||||||||
Net other comprehensive income (loss) | 661.8 | (60.8 | ) | 34.5 | 15.7 | 651.2 | |||||||||||||
Balance at September 30, 2017 (1) | $ | (1,205.5 | ) | $ | 163.2 | $ | (3,337.1 | ) | $ | (195.2 | ) | $ | (4,574.6 | ) |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
Tax benefit (expense) | 2018 | 2017 | 2018 | 2017 | |||||||||||
Foreign currency translation gains/losses | $ | 7.0 | $ | 33.9 | $ | (11.2 | ) | $ | 149.7 | ||||||
Unrealized net gains/losses on securities | (0.2 | ) | (4.2 | ) | 1.1 | 25.4 | |||||||||
Defined benefit pension and retiree health benefit plans | (152.4 | ) | (9.4 | ) | (190.3 | ) | (24.0 | ) | |||||||
Effective portion of cash flow hedges | (0.8 | ) | (1.3 | ) | (2.3 | ) | (8.4 | ) | |||||||
Benefit/(provision) for income taxes allocated to other comprehensive income (loss) items | $ | (146.4 | ) | $ | 19.0 | $ | (202.7 | ) | $ | 142.7 |
Details about Accumulated Other Comprehensive Loss Components | Three Months Ended September 30, | Nine Months Ended September 30, | Affected Line Item in the Consolidated Condensed Statements of Operations | |||||||||||||||
2018 | 2017 | 2018 | 2017 | |||||||||||||||
Amortization of retirement benefit items: | ||||||||||||||||||
Prior service benefits, net | $ | (18.2 | ) | $ | (21.1 | ) | $ | (56.6 | ) | $ | (63.2 | ) | (1) | |||||
Actuarial losses, net | 80.0 | 77.1 | 266.6 | 229.4 | (1) | |||||||||||||
Total before tax | 61.8 | 56.0 | 210.0 | 166.2 | ||||||||||||||
Tax benefit | (14.6 | ) | (15.9 | ) | (45.1 | ) | (48.4 | ) | Income taxes | |||||||||
Net of tax | 47.2 | 40.1 | 164.9 | 117.8 | ||||||||||||||
Unrealized gains/losses on available-for-sale securities: | ||||||||||||||||||
Realized (gains), losses, net | (0.3 | ) | (36.7 | ) | (41.6 | ) | (108.2 | ) | Other–net, (income) expense | |||||||||
Tax (benefit) expense | 0.1 | 12.8 | 8.8 | 37.8 | Income taxes | |||||||||||||
Net of tax | (0.2 | ) | (23.9 | ) | (32.8 | ) | (70.4 | ) | ||||||||||
Other, net of tax | 2.9 | 10.5 | 8.7 | 15.4 | Other–net, (income) expense | |||||||||||||
Total reclassifications for the period (net of tax) | $ | 49.9 | $ | 26.7 | $ | 140.8 | $ | 62.8 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Interest expense | $ | 69.4 | $ | 61.9 | $ | 193.9 | $ | 162.1 | |||||||
Interest income | (32.1 | ) | (45.1 | ) | (118.8 | ) | (114.6 | ) | |||||||
Retirement benefit | (62.9 | ) | (63.8 | ) | (174.2 | ) | (191.3 | ) | |||||||
Other income | 41.0 | (2.9 | ) | 9.0 | (44.8 | ) | |||||||||
Other–net, (income) expense | $ | 15.4 | $ | (49.9 | ) | $ | (90.1 | ) | $ | (188.6 | ) |
Three Months Ended September 30, | |||||||||||||||||||
2018 | 2017 | ||||||||||||||||||
U.S. (1) | Outside U.S. | Total | U.S. (1) | Outside U.S. | Total | ||||||||||||||
Segment revenue—to unaffiliated customers: | |||||||||||||||||||
Human pharmaceutical products: | |||||||||||||||||||
Endocrinology: | |||||||||||||||||||
Trulicity® | $ | 645.9 | $ | 170.3 | $ | 816.2 | $ | 412.9 | $ | 114.8 | $ | 527.7 | |||||||
Humalog® | 365.6 | 299.0 | 664.6 | 414.9 | 281.3 | 696.2 | |||||||||||||
Forteo® | 182.5 | 208.3 | 390.8 | 234.1 | 207.6 | 441.7 | |||||||||||||
Humulin® | 216.9 | 105.1 | 322.1 | 203.0 | 97.5 | 300.5 | |||||||||||||
Basaglar | 157.3 | 43.9 | 201.2 | 115.2 | 30.5 | 145.7 | |||||||||||||
Jardiance | 104.2 | 62.7 | 166.9 | 83.8 | 43.4 | 127.2 | |||||||||||||
Trajenta | 50.3 | 85.3 | 135.7 | 68.4 | 84.9 | 153.3 | |||||||||||||
Other Endocrinology | 73.8 | 66.8 | 140.4 | 92.1 | 76.3 | 168.4 | |||||||||||||
Total Endocrinology | 1,796.5 | 1,041.4 | 2,837.9 | 1,624.4 | 936.3 | 2,560.7 | |||||||||||||
Oncology: | |||||||||||||||||||
Alimta | 288.5 | 232.0 | 520.5 | 260.3 | 254.2 | 514.5 | |||||||||||||
Cyramza® | 67.0 | 131.4 | 198.4 | 69.5 | 126.5 | 196.0 | |||||||||||||
Erbitux | 132.6 | 26.9 | 159.5 | 136.0 | 27.4 | 163.5 | |||||||||||||
Other Oncology | 131.7 | 54.1 | 185.8 | 43.5 | 40.2 | 83.6 | |||||||||||||
Total Oncology | 619.8 | 444.4 | 1,064.2 | 509.3 | 448.3 | 957.6 | |||||||||||||
Cardiovascular: | |||||||||||||||||||
Cialis® | 295.9 | 171.2 | 467.1 | 319.6 | 245.3 | 564.9 | |||||||||||||
Effient | 30.2 | 15.1 | 45.3 | 42.7 | 13.1 | 55.9 | |||||||||||||
Other Cardiovascular | 39.7 | 31.7 | 71.4 | 4.9 | 37.3 | 42.1 | |||||||||||||
Total Cardiovascular | 365.8 | 218.0 | 583.8 | 367.2 | 295.7 | 662.9 | |||||||||||||
Neuroscience: | |||||||||||||||||||
Cymbalta | 14.5 | 157.5 | 172.0 | 19.6 | 163.5 | 183.2 | |||||||||||||
Zyprexa® | 7.0 | 102.8 | 109.9 | 12.6 | 128.0 | 140.6 | |||||||||||||
Strattera® | 10.5 | 88.2 | 98.7 | 52.9 | 84.1 | 137.1 | |||||||||||||
Other Neuroscience | 23.8 | 23.0 | 46.6 | 23.3 | 23.7 | 46.8 | |||||||||||||
Total Neuroscience | 55.8 | 371.5 | 427.2 | 108.4 | 399.3 | 507.7 | |||||||||||||
Immunology: | |||||||||||||||||||
Taltz® | 210.6 | 53.3 | 263.9 | 131.3 | 20.0 | 151.3 | |||||||||||||
Other Immunology | 0.8 | 54.8 | 55.6 | — | 16.3 | 16.3 | |||||||||||||
Total Immunology | 211.4 | 108.1 | 319.5 | 131.3 | 36.3 | 167.6 | |||||||||||||
Other pharmaceuticals | 13.4 | 43.2 | 56.6 | 10.7 | 50.2 | 60.9 | |||||||||||||
Total human pharmaceutical products | 3,062.7 | 2,226.5 | 5,289.2 | 2,751.3 | 2,166.1 | 4,917.4 | |||||||||||||
Animal health products | 383.9 | 388.8 | 772.7 | 353.0 | 387.6 | 740.6 | |||||||||||||
Revenue | $ | 3,446.6 | $ | 2,615.3 | $ | 6,061.9 | $ | 3,104.4 | $ | 2,553.6 | $ | 5,658.0 |
Nine Months Ended September 30, | |||||||||||||||||||
2018 | 2017 | ||||||||||||||||||
U.S. (1) | Outside U.S. | Total | U.S. (1) | Outside U.S. | Total | ||||||||||||||
Segment revenue—to unaffiliated customers: | |||||||||||||||||||
Human pharmaceutical products: | |||||||||||||||||||
Endocrinology: | |||||||||||||||||||
Trulicity | $ | 1,786.5 | $ | 487.8 | $ | 2,274.3 | $ | 1,090.1 | $ | 290.7 | $ | 1,380.8 | |||||||
Humalog | 1,334.2 | 891.8 | 2,226.1 | 1,254.3 | 828.6 | 2,083.0 | |||||||||||||
Forteo | 529.7 | 608.8 | 1,138.5 | 661.5 | 574.3 | 1,235.8 | |||||||||||||
Humulin | 677.3 | 316.7 | 994.0 | 634.9 | 337.9 | 972.8 | |||||||||||||
Basaglar | 440.4 | 128.5 | 569.0 | 196.7 | 81.6 | 278.3 | |||||||||||||
Jardiance | 284.8 | 180.3 | 465.1 | 198.3 | 105.9 | 304.3 | |||||||||||||
Trajenta | 161.3 | 257.2 | 418.5 | 174.2 | 234.1 | 408.2 | |||||||||||||
Other Endocrinology | 199.4 | 206.9 | 406.1 | 283.4 | 228.5 | 511.8 | |||||||||||||
Total Endocrinology | 5,413.6 | 3,078.0 | 8,491.6 | 4,493.4 | 2,681.6 | 7,175.0 | |||||||||||||
Oncology: | |||||||||||||||||||
Alimta | 815.1 | 760.9 | 1,576.0 | 761.9 | 775.4 | 1,537.3 | |||||||||||||
Cyramza | 210.7 | 390.1 | 600.8 | 204.3 | 349.2 | 553.5 | |||||||||||||
Erbitux | 394.0 | 81.6 | 475.5 | 398.2 | 78.8 | 477.0 | |||||||||||||
Other Oncology | 321.4 | 157.1 | 478.6 | 128.4 | 104.3 | 232.7 | |||||||||||||
Total Oncology | 1,741.2 | 1,389.7 | 3,130.9 | 1,492.8 | 1,307.7 | 2,800.5 | |||||||||||||
Cardiovascular: | |||||||||||||||||||
Cialis | 954.9 | 546.2 | 1,501.2 | 997.3 | 728.5 | 1,725.7 | |||||||||||||
Effient | 59.4 | 45.3 | 104.8 | 290.8 | 35.8 | 326.6 | |||||||||||||
Other Cardiovascular | 143.7 | 96.3 | 239.7 | 20.5 | 99.6 | 120.2 | |||||||||||||
Total Cardiovascular | 1,158.0 | 687.8 | 1,845.7 | 1,308.6 | 863.9 | 2,172.5 | |||||||||||||
Neuroscience: | |||||||||||||||||||
Cymbalta | 39.3 | 484.2 | 523.5 | 100.8 | 463.6 | 564.4 | |||||||||||||
Zyprexa | 27.6 | 332.8 | 360.4 | 49.3 | 379.6 | 428.9 | |||||||||||||
Strattera | 74.4 | 269.2 | 343.5 | 276.9 | 243.0 | 519.9 | |||||||||||||
Other Neuroscience | 72.2 | 71.2 | 143.5 | 88.4 | 72.2 | 160.5 | |||||||||||||
Total Neuroscience | 213.5 | 1,157.4 | 1,370.9 | 515.4 | 1,158.4 | 1,673.7 | |||||||||||||
Immunology: | |||||||||||||||||||
Taltz | 495.3 | 135.1 | 630.4 | 343.6 | 43.1 | 386.7 | |||||||||||||
Other Immunology | 2.5 | 130.0 | 132.5 | — | 22.9 | 22.9 | |||||||||||||
Total Immunology | 497.8 | 265.1 | 762.9 | 343.6 | 66.0 | 409.6 | |||||||||||||
Other pharmaceuticals | 49.1 | 139.8 | 189.1 | 34.6 | 149.7 | 184.5 | |||||||||||||
Total human pharmaceutical products | 9,073.2 | 6,717.8 | 15,791.1 | 8,188.4 | 6,227.3 | 14,415.8 | |||||||||||||
Animal health products | 1,137.8 | 1,188.2 | 2,326.0 | 1,173.4 | 1,121.4 | 2,294.8 | |||||||||||||
Revenue | $ | 10,211.0 | $ | 7,906.1 | $ | 18,117.1 | $ | 9,361.8 | $ | 7,348.7 | $ | 16,710.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Segment profits: | |||||||||||||||
Human pharmaceutical products | $ | 1,514.0 | $ | 1,242.5 | $ | 4,751.0 | $ | 3,765.7 | |||||||
Animal health products | 162.6 | 121.9 | 461.9 | 422.6 | |||||||||||
Total segment profits | $ | 1,676.7 | $ | 1,364.4 | $ | 5,213.0 | $ | 4,188.3 | |||||||
Reconciliation of total segment profits to consolidated income before taxes: | |||||||||||||||
Segment profits | $ | 1,676.7 | $ | 1,364.4 | $ | 5,213.0 | $ | 4,188.3 | |||||||
Other profits (losses): | |||||||||||||||
Acquired in-process research and development (Note 3) | (30.0 | ) | (205.0 | ) | (1,654.5 | ) | (1,062.6 | ) | |||||||
Amortization of intangible assets | (153.4 | ) | (155.8 | ) | (458.7 | ) | (510.0 | ) | |||||||
Asset impairment, restructuring, and other special charges (Note 5) | (83.3 | ) | (406.5 | ) | (236.0 | ) | (670.4 | ) | |||||||
Other, net | 1.0 | (5.5 | ) | (7.0 | ) | (32.0 | ) | ||||||||
Consolidated income before taxes | $ | 1,411.0 | $ | 591.6 | $ | 2,856.8 | $ | 1,913.3 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Geographic Information | |||||||||||||||
Revenue—to unaffiliated customers (1): | |||||||||||||||
United States | $ | 3,446.6 | $ | 3,104.4 | $ | 10,211.0 | $ | 9,361.8 | |||||||
Europe | 1,017.0 | 1,017.0 | 3,142.9 | 2,877.6 | |||||||||||
Japan | 608.8 | 616.7 | 1,828.9 | 1,767.0 | |||||||||||
Other foreign countries | 989.5 | 920.0 | 2,934.3 | 2,704.2 | |||||||||||
Revenue | $ | 6,061.9 | $ | 5,658.0 | $ | 18,117.1 | $ | 16,710.6 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
2018 | 2017 | Percent Change | 2018 | 2017 | Percent Change | ||||||||||||||
Revenue | $ | 6,061.9 | $ | 5,658.0 | 7 | $ | 18,117.1 | $ | 16,710.6 | 8 | |||||||||
Gross margin | 4,499.6 | 4,071.7 | 11 | 13,280.8 | 12,204.7 | 9 | |||||||||||||
Gross margin as a percent of revenue | 74.2 | % | 72.0 | % | 73.3 | % | 73.0 | % | |||||||||||
Operating expense (1) | $ | 2,959.9 | $ | 2,918.5 | 1 | $ | 8,623.6 | $ | 8,747.0 | (1) | |||||||||
Acquired in-process research and development (IPR&D) | 30.0 | 205.0 | (85) | 1,654.5 | 1,062.6 | 56 | |||||||||||||
Asset impairment, restructuring, and other special charges | 83.3 | 406.5 | (80) | 236.0 | 670.4 | (65) | |||||||||||||
Net income | 1,149.5 | 555.6 | NM | 2,107.0 | 1,452.8 | 45 | |||||||||||||
Earnings per share | 1.12 | 0.53 | NM | 2.03 | 1.37 | 48 |
• | We recognized acquired IPR&D charges of $30.0 million (pretax), or $0.02 per share, and $1.65 billion, or $1.57 per share, for the three and nine months ended September 30, 2018, respectively. The charge for the three months ended September 30, 2018 was related to upfront fees paid in connection with the collaboration agreement with Anima Biotech (Anima). The charges for the nine months ended September 30, 2018 also included charges associated with the acquisitions of ARMO Biosciences, Inc. (ARMO) and AurKa Pharma, Inc. (AurKa), and in connection with the collaborative agreement with Sigilon Therapeutics (Siglion). The charges for ARMO and AurKa totaling $1.56 billion were not tax deductible. |
• | We recognized charges of $83.3 million (pretax), or $0.07 per share, and $236.0 million (pretax), or $0.20 per share, for the three and nine months ended September 30, 2018, respectively. The charges for the three months ended September 30, 2018 resulted primarily from asset impairment and restructuring charges related to the sale of the Posilac® (rbST) brand and the October 2018 sale of the related Augusta, Georgia manufacturing site. We also incurred expenses associated with the initial public offering and separation of the Elanco animal health business. The charges for the nine months ended September 30, 2018 also included charges related to the decision to suspend commercialization of Imrestor®, an animal health product, expenses related to the decision to end Posilac (rbST) production, and expenses associated with the review of strategic alternatives for the Elanco animal health business. |
• | We recognized acquired IPR&D charges of $205.0 million (pretax), or $0.13 per share, and $1.06 billion (pretax), or $0.94 per share, for the three and nine months ended September 30, 2017, respectively, related to upfront fees paid in connection with the collaboration agreements with Nektar Therapeutics (Nektar) and KeyBioscience AG (KeyBioscience). The charges for the nine months ended September 30, 2017 also included the charge associated with the acquisition of CoLucid Pharmaceuticals, Inc. (CoLucid) which was not tax-deductible. |
• | We recognized charges of $406.5 million (pretax), or $0.29 per share, and $670.4 million (pretax), or $0.48 per share, for the three and nine months ended September 30, 2017, respectively. The charges for the three months ended September 30, 2017 were partially associated with asset impairments related to lower projected revenue for Posilac (rbST), as well as severance costs incurred as a result of actions taken to reduce the company's cost structure. The charges for the nine months ended September 30, 2017 were primarily due to severance costs incurred as a result of actions taken to reduce our cost structure, charges associated with the Posilac (rbST) impairment, integration costs related to the acquisition of Novartis Animal Health (Novartis AH), asset impairments and other charges related to animal health assets, as well as exit costs due to site closures. |
* | Biologic molecule subject to the U.S. Biologics Price Competition and Innovation Act |
** | Diagnostic agent |
Compound | Indication | U.S. | Europe | Japan | Developments |
Endocrinology | |||||
Nasal glucagon | Severe hypoglycemia | Submitted | Phase III | Submitted to U.S. Food and Drug Administration (FDA) in second quarter of 2018. Submitted to European regulatory authorities in third quarter of 2018. | |
Ultra-rapid Lispro | Type 1 and 2 diabetes | Phase III | In October 2018, announced Phase III trials met primary efficacy endpoint. Submission to regulatory authorities expected in 2019. | ||
Immunology | |||||
Mirikizumab | Psoriasis | Phase III | Phase III trials were initiated during the second quarter of 2018. | ||
Ulcerative Colitis | Phase III | Phase III trial was initiated during the second quarter of 2018. | |||
Olumiant | Rheumatoid arthritis | Launched | Granted approval of 2mg dose by FDA and launched in U.S. in second quarter of 2018. | ||
Atopic Dermatitis | Phase III | Phase III trials are ongoing. | |||
Systemic Lupus Erythematosus | Phase III | Phase III trials were initiated during the third quarter of 2018. | |||
Neuroscience | |||||
Flortaucipir | Alzheimer's disease | Phase III | In the third quarter of 2018, announced Phase III trial met primary endpoints. In discussion with regulatory authorities to determine next steps. | ||
Emgality | Cluster headache | Phase III | In the second quarter of 2018, announced Phase III trial met primary endpoint for episodic cluster headache. Received Breakthrough Therapy Designation(1) in the third quarter of 2018. Submission to FDA expected in fourth quarter of 2018. A separate Phase III trial did not meet primary endpoint for chronic cluster headache. | ||
Migraine prevention | Launched | Submitted | Phase III | Approved and launched in the U.S. in the third and fourth quarters of 2018, respectively. Received positive opinion from the Committee for Medicinal Products for Human Use in Europe during the third quarter of 2018. | |
Lanabecestat | Early and mild Alzheimer's disease | Discontinued | Phase III trials discontinued in second quarter of 2018. | ||
Lasmiditan | Migraine | Submitted | Phase III | In third quarter of 2017, announced Phase III trial met primary endpoint. Submitted to FDA in fourth quarter of 2018. See Note 3 to the consolidated condensed financial statements for information on the CoLucid acquisition. | |
Solanezumab | Preclinical Alzheimer's disease | Phase III | Phase III trial is ongoing. | ||
Tanezumab | Osteoarthritis pain | Phase III | In third quarter of 2018, announced initial Phase III trial met primary endpoints. We anticipate additional readouts from the program to be available in 2019. | ||
Chronic low back pain | Phase III | Phase III trial is ongoing. | |||
Cancer pain | Phase III | Phase III trial is ongoing. |
Compound | Indication | U.S. | Europe | Japan | Developments |
Oncology | |||||
Pegilodecakin | Pancreatic cancer | Phase III | Acquired with ARMO in the second quarter of 2018. Phase III trial is ongoing. See Note 3 to the consolidated condensed financial statements for information on the acquisition. | ||
Verzenio | Adjuvant breast cancer | Phase III | Phase III trial is ongoing. | ||
Metastatic breast cancer | Launched | Approved | In October 2018, approved in Europe and Japan. | ||
Lartruvo | Soft tissue sarcoma | Launched | Phase III | Granted accelerated approval(2) by the FDA in fourth quarter of 2016 based on Phase II data. Launched in the U.S. in the fourth quarter of 2016. Granted conditional approval(3) and launched in Europe in fourth quarter of 2016. Phase III trial is ongoing. |
• | Our collaboration with Sigilon, completed in April 2018, for an upfront fee of $62.5 million and an equity investment in Sigilon. |
• | Our acquisition of AurKa, completed in June 2018, for a cash purchase price of $81.3 million, net of cash acquired, plus net accrued liabilities assumed of $0.5 million. |
• | Our acquisition of ARMO, completed in June 2018, for a cash purchase price of $1.40 billion, net of cash acquired, plus net accrued liabilities assumed of $75.8 million. |
• | Our collaboration with Anima, completed in July 2018, for an upfront fee of $30.0 million. |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||
2018 | 2017 | Percent Change | 2018 | 2017 | Percent Change | |||||||||||||
U.S. (1) | $ | 3,446.6 | $ | 3,104.4 | 11 | $ | 10,211.0 | $ | 9,361.8 | 9 | ||||||||
Outside U.S. | 2,615.3 | 2,553.6 | 2 | 7,906.1 | 7,348.7 | 8 | ||||||||||||
Revenue | $ | 6,061.9 | $ | 5,658.0 | 7 | $ | 18,117.1 | $ | 16,710.6 | 8 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||
2018 vs. 2017 | 2018 vs. 2017 | ||||||||||||
U.S. | Outside U.S. | Consolidated | U.S. | Outside U.S. | Consolidated | ||||||||
Volume | 16 | % | 8 | % | 12 | % | 8 | % | 7 | % | 7 | % | |
Price | (5 | ) | (3 | ) | (4 | ) | 1 | (2 | ) | — | |||
Foreign exchange rates | — | (2 | ) | (1 | ) | — | 4 | 2 | |||||
Percent change | 11 | % | 2 | % | 7 | % | 9 | % | 8 | % | 8 | % |
Three Months Ended September 30, | |||||||||||||||||
2018 | 2017 | ||||||||||||||||
Product | U.S. (1) | Outside U.S. | Total | Total | Percent Change | ||||||||||||
Trulicity | $ | 645.9 | $ | 170.3 | $ | 816.2 | $ | 527.7 | 55 | ||||||||
Humalog | 365.6 | 299.0 | 664.6 | 696.2 | (5) | ||||||||||||
Alimta | 288.5 | 232.0 | 520.5 | 514.5 | 1 | ||||||||||||
Cialis | 295.9 | 171.2 | 467.1 | 564.9 | (17) | ||||||||||||
Forteo | 182.5 | 208.3 | 390.8 | 441.7 | (12) | ||||||||||||
Humulin® | 216.9 | 105.1 | 322.1 | 300.5 | 7 | ||||||||||||
Taltz | 210.6 | 53.3 | 263.9 | 151.3 | 74 | ||||||||||||
Basaglar | 157.3 | 43.9 | 201.2 | 145.7 | 38 | ||||||||||||
Cyramza® | 67.0 | 131.4 | 198.4 | 196.0 | 1 | ||||||||||||
Cymbalta® | 14.5 | 157.5 | 172.0 | 183.2 | (6) | ||||||||||||
Jardiance® (2) | 104.2 | 62.7 | 166.9 | 127.2 | 31 | ||||||||||||
Erbitux® | 132.6 | 26.9 | 159.5 | 163.5 | (2) | ||||||||||||
Trajenta™ (3) | 50.3 | 85.3 | 135.7 | 153.3 | (12) | ||||||||||||
Zyprexa® | 7.0 | 102.8 | 109.9 | 140.6 | (22) | ||||||||||||
Strattera | 10.5 | 88.2 | 98.7 | 137.1 | (28) | ||||||||||||
Other human pharmaceutical products | 313.4 | 288.6 | 601.7 | 474.0 | 27 | ||||||||||||
Animal health products | 383.9 | 388.8 | 772.7 | 740.6 | 4 | ||||||||||||
Revenue | $ | 3,446.6 | $ | 2,615.3 | $ | 6,061.9 | $ | 5,658.0 | 7 |
Nine Months Ended September 30, | |||||||||||||||||
2018 | 2017 | ||||||||||||||||
Product | U.S. (1) | Outside U.S. | Total | Total | Percent Change | ||||||||||||
Trulicity | $ | 1,786.5 | $ | 487.8 | $ | 2,274.3 | $ | 1,380.8 | 65 | ||||||||
Humalog | 1,334.2 | 891.8 | 2,226.1 | 2,083.0 | 7 | ||||||||||||
Alimta | 815.1 | 760.9 | 1,576.0 | 1,537.3 | 3 | ||||||||||||
Cialis | 954.9 | 546.2 | 1,501.2 | 1,725.7 | (13) | ||||||||||||
Forteo | 529.7 | 608.8 | 1,138.5 | 1,235.8 | (8) | ||||||||||||
Humulin | 677.3 | 316.7 | 994.0 | 972.8 | 2 | ||||||||||||
Taltz | 495.3 | 135.1 | 630.4 | 386.7 | 63 | ||||||||||||
Cyramza | 210.7 | 390.1 | 600.8 | 553.5 | 9 | ||||||||||||
Basaglar | 440.4 | 128.5 | 569.0 | 278.3 | NM | ||||||||||||
Cymbalta | 39.3 | 484.2 | 523.5 | 564.4 | (7) | ||||||||||||
Erbitux | 394.0 | 81.6 | 475.5 | 477.0 | — | ||||||||||||
Jardiance (2) | 284.8 | 180.3 | 465.1 | 304.3 | 53 | ||||||||||||
Trajenta (3) | 161.3 | 257.2 | 418.5 | 408.2 | 3 | ||||||||||||
Zyprexa | 27.6 | 332.8 | 360.4 | 428.9 | (16) | ||||||||||||
Strattera | 74.4 | 269.2 | 343.5 | 519.9 | (34) | ||||||||||||
Other human pharmaceutical products | 847.7 | 846.7 | 1,694.3 | 1,559.2 | 9 | ||||||||||||
Animal health products | 1,137.8 | 1,188.2 | 2,326.0 | 2,294.8 | 1 | ||||||||||||
Revenue | $ | 10,211.0 | $ | 7,906.1 | $ | 18,117.1 | $ | 16,710.6 | 8 |
(a) | Evaluation of Disclosure Controls and Procedures. Under applicable SEC regulations, management of a reporting company, with the participation of the principal executive officer and principal financial officer, must periodically evaluate the company’s “disclosure controls and procedures,” which are defined generally as controls and other procedures of a reporting company designed to ensure that information required to be disclosed by the reporting company in its periodic reports filed with the SEC (such as this Form 10-Q) is recorded, processed, summarized, and reported on a timely basis. |
(b) | Changes in Internal Controls. During the third quarter of 2018, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. |
Period | Total Number of Shares Purchased (in thousands) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (in thousands) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (in millions) | |||||||||
July 2018 | 8,471 | $ | 96.93 | 8,471 | $ | 7,178.8 | |||||||
August 2018 | 1,719 | 103.96 | 1,719 | 7,000.0 | |||||||||
September 2018 | — | — | — | 7,000.0 | |||||||||
Total | 10,191 | 98.12 | 10,191 |
EXHIBIT 3.1 | Amended Articles of Incorporation | |
EXHIBIT 3.2 | By-laws, as amended | |
EXHIBIT 10.1 | Master Separation Agreement | |
EXHIBIT 31.1 | Rule 13a-14(a) Certification of David A. Ricks, Chairman, President, and Chief Executive Officer | |
EXHIBIT 31.2 | Rule 13a-14(a) Certification of Joshua L. Smiley, Senior Vice President and Chief Financial Officer | |
EXHIBIT 32. | Section 1350 Certification | |
EXHIBIT 101. | Interactive Data Files |
Exhibit | ||
EXHIBIT 3.1 | ||
EXHIBIT 3.2 | ||
EXHIBIT 10.1 | ||
EXHIBIT 31.1 | ||
EXHIBIT 31.2 | ||
EXHIBIT 32. | ||
EXHIBIT 101. | Interactive Data Files |
ELI LILLY AND COMPANY | ||
(Registrant) | ||
Date: | 11/6/2018 | /s/Bronwen L. Mantlo |
Bronwen L. Mantlo | ||
Corporate Secretary | ||
Date: | 11/6/2018 | /s/Donald A. Zakrowski |
Donald A. Zakrowski | ||
Vice President, Finance and Chief Accounting Officer |
1. | I have reviewed this report on Form 10-Q of Eli Lilly and Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 6, 2018 | |
By: | /s/David A. Ricks | |
David A. Ricks | ||
Chairman, President, and Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Eli Lilly and Company; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize, and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
Date: | November 6, 2018 | |
By: | /s/Joshua L. Smiley | |
Joshua L. Smiley | ||
Senior Vice President and Chief Financial Officer |
Date: | November 6, 2018 | /s/David A. Ricks | |
David A. Ricks | |||
Chairman, President, and Chief Executive Officer | |||
Date: | November 6, 2018 | /s/Joshua L. Smiley | |
Joshua L. Smiley | |||
Senior Vice President and Chief Financial Officer |
Document and Entity Information - shares |
9 Months Ended | |
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Sep. 30, 2018 |
Nov. 02, 2018 |
|
Document & Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Lilly Eli & Co | |
Entity Central Index Key | 0000059478 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 1,059,322,255 |
Consolidated Condensed Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
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Income Statement [Abstract] | ||||
Revenue | $ 6,061.9 | $ 5,658.0 | $ 18,117.1 | $ 16,710.6 |
Costs, expenses, and other: | ||||
Cost of sales | 1,562.3 | 1,586.3 | 4,836.3 | 4,505.9 |
Research and development | 1,343.3 | 1,340.0 | 3,853.3 | 3,870.4 |
Marketing, selling, and administrative | 1,616.6 | 1,578.5 | 4,770.3 | 4,876.6 |
Acquired in-process research and development (Note 3) | 30.0 | 205.0 | 1,654.5 | 1,062.6 |
Asset impairment, restructuring, and other special charges (Note 5) | 83.3 | 406.5 | 236.0 | 670.4 |
Other–net, (income) expense (Note 11) | 15.4 | (49.9) | (90.1) | (188.6) |
Cost of sales, operating expenses, and other-net | 4,650.9 | 5,066.4 | 15,260.3 | 14,797.3 |
Income before income taxes | 1,411.0 | 591.6 | 2,856.8 | 1,913.3 |
Income taxes (Note 7) | 261.5 | 36.0 | 749.8 | 460.5 |
Net income | $ 1,149.5 | $ 555.6 | $ 2,107.0 | $ 1,452.8 |
Earnings per share: | ||||
Basic (usd per share) | $ 1.13 | $ 0.53 | $ 2.04 | $ 1.38 |
Diluted (usd per share) | $ 1.12 | $ 0.53 | $ 2.03 | $ 1.37 |
Shares used in calculation of earnings per share: | ||||
Basic (shares) | 1,020.4 | 1,053.4 | 1,033.2 | 1,054.8 |
Diluted (shares) | 1,026.3 | 1,056.0 | 1,037.8 | 1,057.0 |
Consolidated Condensed Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|||
Statement of Comprehensive Income [Abstract] | ||||||
Net income | $ 1,149.5 | $ 555.6 | $ 2,107.0 | $ 1,452.8 | ||
Other comprehensive income, net of tax (Note 10) | [1] | 660.2 | 167.7 | 375.3 | 651.2 | |
Comprehensive income | $ 1,809.7 | $ 723.3 | $ 2,482.3 | $ 2,104.0 | ||
|
Consolidated Condensed Statements of Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2017 |
Sep. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||
Other comprehensive income attributable to controlling interest | $ 165.5 | $ 664.6 |
Other comprehensive income (loss) attributable to noncontrolling interest | $ 2.2 | $ (13.4) |
Consolidated Condensed Statements of Shareholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Millions |
9 Months Ended | ||
---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Jun. 30, 2018 |
|
Statement of Stockholders' Equity [Abstract] | |||
Dividend declared (usd per share) | $ 1.13 | $ 1.04 | |
Remaining authorized repurchase amount | $ 7,000 | ||
Stock repurchase program, authorized amount | $ 8,000 |
Consolidated Condensed Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Receivables, Net, Current [Abstract] | ||
Allowances for doubtful accounts | $ 34.0 | $ 38.7 |
Property and equipment, accumulated depreciation | $ 9,671.7 | $ 9,264.6 |
Consolidated Condensed Statements of Cash Flows - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Cash Flows from Operating Activities | ||
Net income | $ 2,107.0 | $ 1,452.8 |
Adjustments to Reconcile Net Income to Cash Flows from Operating Activities: | ||
Depreciation and amortization | 1,263.5 | 1,155.4 |
Change in deferred income taxes | 161.6 | 151.7 |
Stock-based compensation expense | 206.7 | 209.1 |
Acquired in-process research and development | 1,654.5 | 1,062.6 |
Other changes in operating assets and liabilities, net of acquisitions | (1,638.2) | (525.2) |
Other non-cash operating activities, net | 320.7 | 365.7 |
Net Cash Provided by Operating Activities | 4,075.8 | 3,872.1 |
Cash Flows from Investing Activities | ||
Net purchases of property and equipment | (816.3) | (633.3) |
Proceeds from sales and maturities of short-term investments | 2,535.5 | 2,320.2 |
Purchases of short-term investments | (112.2) | (2,973.8) |
Proceeds from sales of noncurrent investments | 3,444.7 | 1,686.9 |
Purchases of noncurrent investments | (719.7) | (3,739.6) |
Cash paid for acquisitions, net of cash acquired (Note 3) | 0.0 | (882.1) |
Purchase of in-process research and development (Note 3) | (1,578.2) | (1,036.8) |
Other investing activities, net | (188.8) | (178.0) |
Net Cash Provided by (Used for) Investing Activities | 2,565.0 | (5,436.5) |
Cash Flows from Financing Activities | ||
Dividends paid | (1,739.2) | (1,643.8) |
Net change in short-term borrowings | (2,297.1) | 1,226.8 |
Proceeds from issuance of long-term debt | 2,477.7 | 2,232.0 |
Repayments of long-term debt | (1,001.5) | (630.6) |
Purchases of common stock | (3,050.7) | (199.9) |
Net proceeds from Elanco initial public offering (Note 3) | 1,659.7 | 0.0 |
Other financing activities, net | (314.1) | (299.6) |
Net Cash Provided by (Used for) Financing Activities | (4,265.2) | 684.9 |
Effect of exchange rate changes on cash and cash equivalents | 48.2 | 21.7 |
Net increase (decrease) in cash and cash equivalents | 2,423.8 | (857.8) |
Cash and cash equivalents at January 1 | 6,536.2 | 4,582.1 |
Cash and Cash Equivalents at September 30 | $ 8,960.0 | $ 3,724.3 |
Basis of Presentation and Revenue |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Basis of Presentation and Revenue | Basis of Presentation and Revenue We have prepared the accompanying unaudited consolidated condensed financial statements in accordance with the requirements of Form 10-Q and, therefore, they do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with accounting principles generally accepted in the United States (GAAP). In our opinion, the financial statements reflect all adjustments (including those that are normal and recurring) that are necessary for a fair presentation of the results of operations for the periods shown. In preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures at the date of the financial statements and during the reporting period. Actual results could differ from those estimates. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with our consolidated financial statements and accompanying notes included in our Annual Report on Form 10-K for the year ended December 31, 2017. We issue our financial statements by filing with the Securities and Exchange Commission (SEC) and have evaluated subsequent events up to the time of the filing. All per-share amounts, unless otherwise noted in the footnotes, are presented on a diluted basis, that is, based on the weighted-average number of outstanding common shares plus the effect of incremental shares from our stock-based compensation programs. Adoption of Revenue Accounting Standard Effective January 1, 2018, we adopted Accounting Standards Update 2014-09, Revenue from Contracts with Customers and other related updates (see Note 2 for additional discussion). The new standard has been applied to contracts for which performance was not substantially complete as of the date of adoption. For those contracts that were modified prior to the date of adoption, we reflected the aggregate effect of those modifications when determining the appropriate accounting under the new standard. We don’t believe the effect of applying this practical expedient resulted in material differences. Revenue presented for periods prior to 2018 was accounted for under previous standards and has not been adjusted. Revenue and net income for the three and nine months ended September 30, 2018 do not differ materially from amounts that would have resulted from application of the previous standards. The following table summarizes our revenue recognized in our consolidated condensed statements of operations:
(1) Collaboration and other revenue associated with prior year transfers of intellectual property was $76.2 million and $258.4 million during the three and nine months ended September 30, 2018, respectively, and $36.7 million and $105.5 million during the three and nine months ended September 30, 2017, respectively. We recognize revenue primarily from two different types of contracts, product sales to customers (net product revenue) and collaborations and other arrangements. Revenue recognized from collaborations and other arrangements will include our share of profits from the collaboration, as well as royalties, upfront and milestone payments we receive under these types of contracts. See Note 4 for additional information related to our collaborations and other arrangements. Collaboration and other revenue disclosed above includes the revenue from the Trajenta™ and Jardiance® families of products resulting from our collaboration with Boehringer Ingelheim discussed in Note 4. Substantially all of the remainder of collaboration and other revenue is related to contracts accounted for as contracts with customers. Net Product Revenue Revenue from sales of products is recognized at the point where the customer obtains control of the goods and we satisfy our performance obligation, which generally is at the time we ship the product to the customer. Payment terms differ by jurisdiction and customer, but payment terms in most of our major jurisdictions typically range from 30 to 75 days from date of shipment. Revenue for our product sales has not been adjusted for the effects of a financing component as we expect, at contract inception, that the period between when we transfer control of the product and when we receive payment will be one year or less. Any exceptions are either not material or we collect interest for payments made after the due date. Provisions for rebates and discounts, and returns are established in the same period the related sales are recognized. We generally ship product shortly after orders are received; therefore, we generally only have a few days of orders received but not yet shipped at the end of any reporting period. Shipping and handling activities are considered to be fulfillment activities and are not considered to be a separate performance obligation. We exclude from the measurement of the transaction price all taxes assessed by a governmental authority that are imposed on our sales of product and collected from a customer. Significant judgments must be made in determining the transaction price for our sales of products related to anticipated rebates and discounts and returns. The following describe the most significant of these judgments: Sales Rebates and Discounts - Background and Uncertainties
Sales Returns - Background and Uncertainties
Adjustments to Revenue Adjustments to revenue recognized as a result of changes in estimates for the judgments described above during the three and nine months ended September 30, 2018, for product shipped in previous years were not material. Disaggregation of Revenue Our disaggregated revenue is disclosed in Note 12. Collaborations and Other Arrangements We recognize several types of revenue from our collaborations and other arrangements, which we discuss in general terms immediately below and more specifically in Note 4 for each of our material collaborations and other arrangements. Our collaborations and other arrangements are not contracts with customers but are evaluated to determine whether any aspects of the arrangements are contracts with customers.
Contract Liabilities Our contract liabilities result from arrangements where we have received payment in advance of performance under the contract and do not include sales rebates, discounts, and returns. Changes in contract liabilities are generally due to either receipt of additional advance payments or our performance under the contract. We have the following amounts recorded for contract liabilities:
The contract liabilities amount disclosed above as of September 30, 2018, is primarily related to:
Revenue recognized from contract liabilities as of January 1, 2018, during the three and nine months ended September 30, 2018, was not material. Revenue expected to be recognized in the future from contract liabilities as the related performance obligations are satisfied is not expected to be material in any one year. |
Implementation of New Financial Accounting Pronouncements |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Implementation of New Financial Accounting Pronouncements | Implementation of New Financial Accounting Pronouncements The following table provides a brief description of accounting standards that were effective January 1, 2018 and were adopted on that date:
The following table provides a brief description of the accounting standard that has not yet been adopted and could have a material effect on our financial statements:
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Divestures and Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Divestiture and Acquisitions | Divestiture and Acquisitions Divestiture Formation of Elanco and Initial Public Offering On September 24, 2018, Elanco Animal Health Incorporated (Elanco) completed an initial public offering (the IPO) resulting in the issuance of 72.3 million shares of its common stock, which represents 19.8 percent of Elanco's outstanding shares, at $24 per share. Elanco shares began trading on the New York Stock Exchange under the symbol "ELAN" in September 2018. In connection with the completion of the IPO, through a series of equity and other transactions, we transferred to Elanco the animal health businesses that form its business going forward. In exchange, Elanco transferred to us, or will transfer to us, consideration of approximately $4.2 billion, which consists primarily of the net proceeds from the IPO, the net proceeds from the debt offering completed by Elanco in August 2018, and the term loan facility entered into by Elanco during the period (see Note 6). The consideration that we receive is intended to be used for debt repayment, dividends, and/or share repurchases. The excess of the net proceeds from the IPO over the net book value of our divested interest was $629.2 million and was recorded in additional paid-in capital. Of our consolidated cash and cash equivalents as of September 30, 2018, approximately $300 million is retained by Elanco for working capital purposes. We continue to consolidate Elanco, as we retain control over Elanco. The earnings attributable to the divested, noncontrolling interest for the period from IPO until September 30, 2018 were not material for the three and nine months ended September 30, 2018. As of September 30, 2018, the noncontrolling interest of $1.02 billion associated with Elanco is reflected in noncontrolling interests in the consolidated condensed balance sheet. Acquisitions On January 3, 2017, we completed the acquisition of Boehringer Ingelheim Vetmedica, Inc.'s United States (U.S.) feline, canine, and rabies vaccine portfolio and other related assets (BIVIVP). This transaction, as further discussed in this note below in Acquisition of a Business, was accounted for as a business combination under the acquisition method of accounting. Under this method, the assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date in our consolidated financial statements. The determination of estimated fair value required management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets, where applicable, has been recorded as goodwill. The results of operations of this acquisition have been included in our consolidated condensed financial statements from the date of acquisition. In addition to the acquisition of BIVIVP, we acquired assets in development in the nine months ended September 30, 2018, which are further discussed in this note below in Asset Acquisitions. Upon acquisition, the acquired in-process research and development (IPR&D) charges related to these products were immediately expensed because the products had no alternative future use. We incurred acquired IPR&D charges of $30.0 million and $1.65 billion for the three and nine months ended September 30, 2018, respectively, and $205.0 million and $1.06 billion for the three and nine months ended September 30, 2017, respectively. Acquisition of a Business Boehringer Ingelheim Vetmedica, Inc. Vaccine Portfolio Acquisition Overview of Transaction In 2017, we acquired BIVIVP in an all-cash transaction for $882.1 million. Under the terms of the agreement, we acquired a manufacturing and research and development site and a U.S. vaccine portfolio, including vaccines used for the treatment of bordetella, Lyme disease, rabies, and parvovirus, among others. Assets Acquired and Liabilities Assumed The following table summarizes the amounts recognized for assets acquired and liabilities assumed as of the acquisition date:
(1) These intangible assets, which are being amortized to cost of sales on a straight-line basis over their estimated useful lives, were expected to have a weighted average useful life of 10 years. (2) The goodwill recognized from this acquisition is attributable primarily to expected synergies from combining the operations of BIVIVP with our legacy animal health business, future unidentified projects and products, and the assembled workforce of BIVIVP. The goodwill associated with this acquisition is deductible for tax purposes. Asset Acquisitions The following table and narrative summarize our asset acquisitions during the nine months ended September 30, 2018 and September 30, 2017.
(1) The phase of development presented is as of the date of the arrangement and represents the phase of development of the most advanced asset acquired, where applicable. In connection with the arrangements described herein, our partners may be entitled to future royalties and/or commercial milestones based on sales should these products be approved for commercialization and/or milestones based on the successful progress of the compounds through the development process. We entered into a collaboration agreement with Sigilon to develop encapsulated cell therapies for the potential treatment of type 1 diabetes. Sigilon will create proprietary products comprised of induced pluripotent stem cells engineered into differentiated insulin-producing pancreatic beta cells and encapsulated using Sigilon's Afibromer technology. We will receive an exclusive worldwide license to Sigilon's Afibromer technology for islet cell encapsulation. Under the terms of the agreement, we paid an upfront fee of $62.5 million and made an equity investment in Sigilon. We acquired AK-01 through the acquisition of AurKa. Under the terms of the agreement, we acquired all shares of AurKa for a cash purchase price of $81.3 million, net of cash acquired, plus net accrued liabilities assumed of $0.5 million. Substantially all the value of AurKa was related to AK-01, its only significant asset. The acquired IPR&D expense was not tax deductible. We acquired pegilodecakin through the acquisition of ARMO. Under the terms of the agreement, we acquired all shares of ARMO for a cash purchase price of $1.40 billion, net of cash acquired, plus net accrued liabilities assumed of $75.8 million. Substantially all of the value of ARMO was related to pegilodecakin, its only significant asset. The acquired IPR&D expense was not tax deductible. We entered into a collaboration agreement with Anima for the discovery and development of translation inhibitors for several target proteins by using Anima's translation control therapeutics platform. Under the terms of the agreement, we paid an upfront fee of $30.0 million. Anima will use its technology platform to discover lead candidates that are translation inhibitors of our selected neuroscience targets. We will be responsible for all clinical development and commercialization activities and costs related to the collaboration. We acquired lasmiditan through the acquisition of CoLucid. Under the terms of the agreement, we acquired all shares of CoLucid for a cash purchase price of $831.8 million, net of cash acquired, plus net accrued liabilities assumed of $25.8 million. Substantially all of the value of CoLucid was related to lasmiditan, its only significant asset. The acquired IPR&D expense was not tax deductible. Our collaboration agreement with KeyBioscience provides us with access to KeyBioscience's Dual Amylin Calcitonin Receptor Agonists (DACRAs), a potential new class of treatments for metabolic disorders such as type 2 diabetes, along with multiple molecules. Prior to entering into the agreement, KeyBioscience had initiated Phase II development of the lead molecule. The other assets included in the collaboration range from pre-clinical to Phase I development. Under the terms of the agreement, we receive worldwide rights to develop and commercialize these molecules. Our collaboration with Nektar is to co-develop Nektar's compound which has the potential to treat a number of autoimmune and other chronic inflammatory conditions. Under the terms of the agreement, we are responsible for all costs of global commercialization. Nektar will have an option to co-promote in the U.S. under certain conditions. In September 2018, we announced a license agreement with Chugai Pharmaceutical Company for OWL833, an oral non-peptidic GLP-1 receptor agonist. OWL833 is a preclinical asset that is being studied for the treatment of type 2 diabetes. Under the terms of the agreement, we will acquire worldwide development and commercialization rights to OWL833 for a cash purchase price of $50.0 million and success-based milestones and royalties. The transaction is expected to close in the fourth quarter of 2018, subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. We expect an acquired IPR&D charge of $50.0 million in the fourth quarter of 2018. In October 2018, we announced a global license and research agreement with Dicerna Pharmaceuticals (Dicerna) for the discovery, development, and commercialization of potential new medicines in the areas of cardio-metabolic disease, neurodegeneration, and pain. Under terms of the agreement, we will pay an upfront fee of $100.0 million and make an equity investment in Dicerna. The transaction is subject to clearance under the Hart-Scott-Rodino Antitrust Improvements Act and other customary closing conditions. Upon closing, we will record an acquired IPR&D expense of approximately $135 million. In October 2018, we acquired a Priority Review Voucher from SIGA Technologies, Inc. for a cash purchase price of $80.0 million. We intend to utilize the voucher to fast track a product application for an existing R&D project, although the specific project has not yet been determined. As a result of this transaction, we will record an acquired IPR&D expense of $80.0 million in the fourth quarter of 2018. In November 2018, we entered into a collaboration agreement with NextCure, Inc. (NextCure) for the discovery and development of immuno-oncology cancer therapies. NextCure will apply its discovery platform technology to identify novel, functional immune-related targets and we will develop antibodies to these targets. The parties will be able to exclusively license antibodies resulting from the collaboration. Under terms of the agreement, we will pay an upfront fee of $25.0 million and make an equity investment in NextCure. As a result of this transaction, we will record an acquired IPR&D expense of approximately $30 million in the fourth quarter of 2018. |
Collaborations and Other Arrangements |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collaborations and Other Arrangements | Collaborations and Other Arrangements We often enter into collaborative and other similar arrangements to develop and commercialize drug candidates. Collaborative activities may include research and development, marketing and selling (including promotional activities and physician detailing), manufacturing, and distribution. These arrangements often require milestone and royalty or profit-share payments, contingent upon the occurrence of certain future events linked to the success of the asset in development, as well as expense reimbursements or payments to the collaboration partner. See Note 1 for amounts of collaboration and other revenue recognized from these types of arrangements. Operating expenses for costs incurred pursuant to these arrangements are reported in their respective expense line item, net of any payments due to or reimbursements due from our collaboration partners, with such reimbursements being recognized at the time the party becomes obligated to pay. Each collaboration is unique in nature, and our more significant arrangements are discussed below. Boehringer Ingelheim Diabetes Collaboration We and Boehringer Ingelheim have a global agreement to jointly develop and commercialize a portfolio of diabetes compounds. Currently included in the collaboration are Boehringer Ingelheim’s oral diabetes products: Trajenta, Jentadueto®, Jardiance, Glyxambi®, and Synjardy®, as well as our basal insulin: Basaglar®. The table below summarizes significant regulatory and commercialization events and milestones (deferred) capitalized for the compounds included in this collaboration:
(1) In connection with the regulatory approvals of Basaglar in the U.S., Europe, and Japan, milestone payments received were recorded as contract liabilities and are being amortized through the term of the collaboration (2029) to collaboration and other revenue. In connection with the regulatory approvals of Trajenta and Jardiance, milestone payments made were capitalized as intangible assets and are being amortized to cost of sales through the term of the collaboration. (2) Jentadueto is included in the Trajenta product family. The collaboration agreement with Boehringer Ingelheim for Trajenta ends upon expiration of the compound patent and any supplementary protection certificates or extensions thereto. (3) Glyxambi and Synjardy are included in the Jardiance product family. The collaboration agreement with Boehringer Ingelheim for Jardiance ends upon expiration of the compound patent and any supplementary protection certificates or extensions thereto. (4) The cumulative amount represents the total initial amounts that were (deferred) or capitalized from the start of this collaboration through the end of the reporting period. In the most significant markets, we and Boehringer Ingelheim share equally the ongoing development costs, commercialization costs, and agreed upon gross margin for any product resulting from the collaboration. We record our portion of the gross margin associated with Boehringer Ingelheim's compounds as collaboration and other revenue. We record our sales of Basaglar to third parties as net product revenue with the payments made to Boehringer Ingelheim for their portion of the gross margin recorded as cost of sales. For all compounds under this collaboration, we record our portion of the development and commercialization costs as research and development expense and marketing, selling, and administrative expense, respectively. Each company is entitled to potential performance payments depending on the sales of the molecules it contributes to the collaboration. These performance payments result in the owner of the molecule retaining a greater share of the agreed upon gross margin of that product. Subject to achieving these thresholds, in a given period, our reported revenue for Trajenta and Jardiance may be reduced by any performance payments we make related to these products. Similarly, performance payments we may receive related to Basaglar effectively reduce Boehringer Ingelheim's share of the gross margin, which reduces our cost of sales. The following table summarizes our collaboration and other revenue recognized with respect to the Trajenta and Jardiance families of products and net product revenue recognized with respect to Basaglar:
Erbitux® We have several collaborations with respect to Erbitux. The most significant collaborations are or, where applicable, were in Japan, and prior to the transfer of commercialization rights in the fourth quarter of 2015, the U.S. and Canada (Bristol-Myers Squibb Company); and worldwide except the U.S. and Canada (Merck KGaA). Certain rights to Erbitux outside the U.S. and Canada (collectively, North America) will remain with Merck KGaA (Merck) upon expiration of that agreement. The following table summarizes our revenue recognized with respect to Erbitux:
Bristol-Myers Squibb Company Pursuant to commercial agreements with Bristol-Myers Squibb Company and E.R. Squibb (collectively, BMS), we had been co-developing Erbitux in North America exclusively with BMS. On October 1, 2015, BMS transferred their commercialization rights to us with respect to Erbitux in North America pursuant to a modification of our existing arrangement, and we began selling Erbitux at that time. This modification did not affect our rights with respect to Erbitux in other jurisdictions. In connection with the modification of terms, we provided consideration to BMS based upon a tiered percentage of net sales of Erbitux in North America estimated to average 38 percent through September 2018. The transfer of the commercialization rights was accounted for as an acquisition of a business. The consideration to be paid to BMS was accounted for as contingent consideration liability. See Note 6 for discussion regarding the estimation of this liability. Merck KGaA A development and license agreement grants Merck exclusive rights to market Erbitux outside of North America until December 2018. A separate agreement grants co-exclusive rights among Merck, BMS, and us in Japan and expires in 2032. This agreement was amended in 2015 to grant Merck exclusive commercialization rights in Japan but did not result in any changes to our rights. Merck manufactures Erbitux for supply in its territory as well as for Japan. We receive a royalty on the sales of Erbitux outside of North America, which is included in collaboration and other revenue as the underlying sales occur. Royalties due to third parties are recorded as a reduction of collaboration and other revenue, net of any royalty reimbursements due from third parties. Olumiant® We have a worldwide license and collaboration agreement with Incyte Corporation (Incyte) which provides us the development and commercialization rights to its Janus tyrosine kinase inhibitor compound, now known as Olumiant, and certain follow-on compounds, for the treatment of inflammatory and autoimmune diseases. Incyte has the right to receive tiered, double-digit royalty payments on future global sales with rates ranging up to 20 percent if the product is successfully commercialized. The agreement provides Incyte with options to co-develop these compounds on an indication-by-indication basis by funding 30 percent of the associated development costs from the initiation of a Phase IIb trial through regulatory approval in exchange for increased tiered royalties ranging up to percentages in the high twenties. Incyte exercised its option to co-develop Olumiant in rheumatoid arthritis in 2010 and psoriatic arthritis, atopic dermatitis, alopecia areata, and systemic lupus erythematosus (SLE) in 2017. The agreement calls for payments by us to Incyte associated with certain development, success-based regulatory, and sales-based milestones. The following table summarizes our milestones achieved:
As of September 30, 2018, Incyte is eligible to receive up to $130.0 million of additional payments from us contingent upon certain development and success-based regulatory milestones. Incyte is also eligible to receive up to $150.0 million of potential sales-based milestones. Effient® We are in a collaborative arrangement with Daiichi Sankyo Co., Ltd. (Daiichi Sankyo) to develop, market, and promote Effient. Marketing rights for major territories are shown below. We and Daiichi Sankyo each have exclusive marketing rights in certain other territories.
While major European markets are a co-promotion territory under the terms of our arrangement, Daiichi Sankyo exclusively promotes Effient in these markets. The parties share approximately 50/50 in the profits, as well as in the costs of development and marketing in the co-promotion territories. A third party manufactures bulk product, and we produce the finished product for our exclusive and co-promotion territories, including the major European markets. We record net product revenue in our exclusive and co-promotion territories where we are the selling party. Profit-share payments due to Daiichi Sankyo for co-promotion countries where we are the selling party are recorded as marketing, selling, and administrative expenses. Any profit-share payments due to us from Daiichi Sankyo for the major European markets are recorded as collaboration and other revenue. We also record our share of the expenses in these co-promotion territories as marketing, selling, and administrative expenses. In our exclusive territories, we pay Daiichi Sankyo a royalty specific to these territories. All royalties due to Daiichi Sankyo and the third-party manufacturer are recorded in cost of sales. Generic versions of Effient launched in the U.S. in the third quarter of 2017. The following table summarizes our revenue recognized with respect to Effient:
Tanezumab We have a collaboration agreement with Pfizer Inc. (Pfizer) to jointly develop and globally commercialize tanezumab for the treatment of osteoarthritis pain, chronic low back pain, and cancer pain. Under the agreement, the companies share equally the ongoing development costs and, if successful, in gross margins and certain commercialization expenses. As of September 30, 2018, Pfizer is eligible to receive up to $350.0 million in success-based regulatory milestones and up to $1.23 billion in a series of sales-based milestones, contingent upon the commercial success of tanezumab. |
Asset Impairment, Restructuring, and Other Special Charges |
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Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Asset Impairment, Restructuring, and Other Special Charges | Asset Impairment, Restructuring, and Other Special Charges The components of the charges included in asset impairment, restructuring, and other special charges in our consolidated condensed statements of operations are described below.
Severance charges recognized during the nine months ended September 30, 2018 primarily relate to severance adjustments recorded in the second quarter of 2018. Our severance charges recognized in the second half of 2017 as part of planned restructuring activities were based upon estimates for the number of employees that either lost or were going to lose their then current roles and would ultimately leave the company. During the second quarter of 2018, we determined that more displaced employees than expected were able to find other roles within the company, resulting in an immaterial reduction in the actual severance costs incurred. We expect the majority of the remaining severance payments to be made in the next 12 months. Asset impairment and other special charges recognized during the three months ended September 30, 2018 resulted primarily from asset impairment and other restructuring charges related to the sale of the Posilac® (rbST) brand and the associated Augusta, Georgia manufacturing site. We also incurred expenses associated with the IPO and separation of Elanco. These expenses were offset by a gain recognized associated with the pension curtailment (see Note 8 for additional discussion). In addition to the charges for the three months ended September 30, 2018, additional asset impairment and other special charges for the nine months ended September 30, 2018 included asset impairment, exit costs, and other charges related to the decision to end Posilac (rbST) production at the Augusta, Georgia manufacturing site, and charges related to the decision to suspend commercialization of Imrestor®, an animal health product. We also incurred expenses associated with the review of strategic alternatives for the Elanco animal health business. Severance costs recognized during the three and nine months ended September 30, 2017 were incurred as a result of actions taken to reduce our cost structure, as well as the integration of Novartis Animal Health (Novartis AH). Substantially all of the asset impairment and other special charges recognized during the three months ended September 30, 2017 were related to lower projected revenue for Posilac (rbST). The assets associated with Posilac (rbST) were written down to their fair values, which were determined based upon a discounted cash flow valuation. Other asset impairment and other special charges recognized during the three months ended September 30, 2017 related to exit costs associated with site closures. Asset impairment and other special charges recognized during the nine months ended September 30, 2017 resulted primarily from charges associated with the Posilac (rbST) impairment, integration costs of Novartis AH, as well as asset impairments due to site closures. |
Financial Instruments |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Instruments | Financial Instruments Financial instruments that potentially subject us to credit risk consist principally of trade receivables and interest-bearing investments. Wholesale distributors of life-science products account for a substantial portion of our trade receivables; collateral is generally not required. The risk associated with this concentration is mitigated by our ongoing credit-review procedures and insurance. A large portion of our cash is held by a few major financial institutions. We monitor our exposures with these institutions and do not expect any of these institutions to fail to meet their obligations. Major financial institutions represent the largest component of our investments in corporate debt securities. In accordance with documented corporate risk-management policies, we monitor the amount of credit exposure to any one financial institution or corporate issuer. We are exposed to credit-related losses in the event of nonperformance by counterparties to risk-management instruments but do not expect any counterparties to fail to meet their obligations given their high credit ratings. Our equity investments are accounted for using three different methods depending on the type of equity investment:
We review equity investments other than public equity investments for indications of impairment on a regular basis. Our derivative activities are initiated within the guidelines of documented corporate risk-management policies and are intended to offset losses and gains on the assets, liabilities, and transactions being hedged. Management reviews the correlation and effectiveness of our derivatives on a quarterly basis. For derivative instruments that are designated and qualify as fair value hedges, the derivative instrument is marked to market, with gains and losses recognized currently in income to offset the respective losses and gains recognized on the underlying exposure. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of gains and losses is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same period the hedged transaction affects earnings. For derivative and non-derivative instruments that are designated and qualify as net investment hedges, the effective portion of foreign currency translation gains or losses due to spot rate fluctuations are reported as a component of accumulated other comprehensive loss. Hedge ineffectiveness is immediately recognized in earnings. Derivative contracts that are not designated as hedging instruments are recorded at fair value with the gain or loss recognized in current earnings during the period of change. We may enter into foreign currency forward or option contracts to reduce the effect of fluctuating currency exchange rates (principally the euro, British pound, and the Japanese yen). Foreign currency derivatives used for hedging are put in place using the same or like currencies and duration as the underlying exposures. Forward and option contracts are principally used to manage exposures arising from subsidiary trade and loan payables and receivables denominated in foreign currencies. These contracts are recorded at fair value with the gain or loss recognized in other–net, (income) expense. We may enter into foreign currency forward and option contracts and currency swaps as fair value hedges of firm commitments. Forward contracts generally have maturities not exceeding 12 months. At September 30, 2018, we had outstanding foreign currency forward commitments to purchase 1.40 billion U.S. dollars and sell 1.19 billion euro, commitments to purchase 1.57 billion euro and sell 1.84 billion U.S. dollars, commitments to purchase 426.9 million U.S. dollars and sell 47.94 billion Japanese yen, commitments to purchase 234.1 million Swiss Francs and sell 243.2 million U.S. dollars, commitments to purchase 512.2 million U.S. dollars and sell 389.4 million British pounds, and commitments to purchase 466.4 million British pounds and sell 613.0 million U.S. dollars, which will all settle within 30 days. Foreign currency exchange risk is also managed through the use of foreign currency debt and cross-currency interest rate swaps. Our foreign currency-denominated notes had carrying amounts of $3.45 billion and $3.70 billion as of September 30, 2018 and December 31, 2017, respectively, and have been designated as, and are effective as, economic hedges of net investments in certain of our euro-denominated and Swiss franc-denominated foreign operations. Our cross-currency interest rate swaps that convert a portion of our U.S. dollar-denominated floating rate debt to foreign-denominated floating rate debt have also been designated as, and are effective as, economic hedges of net investments. At September 30, 2018, we had outstanding cross currency swaps with notional amounts of $1.53 billion swapping euro to U.S. dollars and $350.0 million swapping British pounds to U.S. dollars, which will all settle within 12 months. In the normal course of business, our operations are exposed to fluctuations in interest rates which can vary the costs of financing, investing, and operating. We address a portion of these risks through a controlled program of risk management that includes the use of derivative financial instruments. The objective of controlling these risks is to limit the impact of fluctuations in interest rates on earnings. Our primary interest-rate risk exposure results from changes in short-term U.S. dollar interest rates. In an effort to manage interest-rate exposures, we strive to achieve an acceptable balance between fixed- and floating-rate debt and investment positions and may enter into interest rate swaps or collars to help maintain that balance. Interest rate swaps or collars that convert our fixed-rate debt to a floating rate are designated as fair value hedges of the underlying instruments. Interest rate swaps or collars that convert floating-rate debt to a fixed rate are designated as cash flow hedges. Interest expense on the debt is adjusted to include the payments made or received under the swap agreements. Cash proceeds from or payments to counterparties resulting from the termination of interest rate swaps are classified as operating activities in our consolidated condensed statements of cash flows. At September 30, 2018, substantially all of our total long-term debt is at a fixed rate. We have converted 20 percent of our long-term fixed-rate notes to floating rates through the use of interest rate swaps. We may enter into forward contracts and designate them as cash flow hedges to limit the potential volatility of earnings and cash flow associated with forecasted sales of available-for-sale securities. We also may enter into forward-starting interest rate swaps, which we designate as cash flow hedges, as part of any anticipated future debt issuances in order to reduce the risk of cash flow volatility from future changes in interest rates. Upon completion of a debt issuance and termination of the swap, the change in fair value of these instruments is recorded as part of other comprehensive income (loss) and is amortized to interest expense over the life of the underlying debt. Elanco Debt Issuance In August 2018, our wholly owned subsidiary, Elanco, issued $2.00 billion of senior notes in a private placement. The senior notes are comprised of $500.0 million of 3.91 percent senior notes due in August 2021, $750.0 million of 4.27 percent senior notes due in August 2023, and $750.0 million of 4.90 percent senior notes due in August 2028. Interest is to be paid semi-annually and the interest rate payable on each series of senior notes is subject to adjustment if certain bond rating agencies downgrade, or subsequently upgrade, their ratings on the respective series of senior notes. The indenture that governs the Elanco senior notes contains covenants, including limitations on the ability of Elanco and certain Elanco subsidiaries to incur liens or engage in sale-leaseback transactions. The indenture also contains restrictions on Elanco's ability to consolidate, merge or sell substantially all of their assets, in addition to other customary terms. Elanco was in compliance with all such covenants under the indentures governing the senior notes as of September 30, 2018. Elanco has entered into an agreement that requires them to use commercially reasonable efforts to cause a registration statement to become effective with the SEC by August 28, 2019, relating to an offer to exchange the senior notes for registered senior notes having substantially identical terms, or in certain cases, to register the senior notes for resale. If they do not register or exchange the senior notes pursuant to the terms of the registration rights agreement, they will be required to pay additional interest to the holders of the senior notes under certain circumstances. In September 2018, Elanco entered into a revolving credit agreement with a syndicate of banks providing for a five-year $750.0 million senior revolving credit facility (Revolving Facility). The Revolving Facility bears interest at a variable rate plus specified margin as defined in the agreement and is payable quarterly. There were no borrowings outstanding under the Revolving Facility at September 30, 2018. The Revolving Facility is payable in full at the end of the term. In September 2018, Elanco also entered into a $500.0 million three-year term loan under a term credit facility with a syndicate of banks (the Term Facility and collectively with the Revolving Facility, the Credit Facilities). The Term Facility bears interest at a variable rate plus margin as defined in the Term Facility and is payable quarterly. The Term Facility is payable in full at the end of the term. The Credit Facilities are subject to various financial and other covenants including restrictions on Elanco's level of borrowings based on their consolidated leverage ratio and their consolidated interest coverage ratio. Elanco was in compliance with all such covenants as of September 30, 2018. The aggregate net proceeds of the senior notes and Term Facility was $2.48 billion. See Note 3 for a discussion of the use of the proceeds of the debt offerings as part of the formation of Elanco and their IPO process. The Effect of Risk-Management Instruments on the Consolidated Condensed Statements of Operations The following effects of risk-management instruments were recognized in other–net, (income) expense:
During the nine months ended September 30, 2018 and 2017, net losses related to ineffectiveness, as well as net losses related to the portion of our risk-management hedging instruments, fair value hedges, and cash flow hedges that were excluded from the assessment of effectiveness, were not material. The Effect of Risk-Management Instruments on Other Comprehensive Income (Loss) The effective portion of risk-management instruments that was recognized in other comprehensive income (loss) is as follows:
During the next 12 months, we expect to reclassify $15.0 million of pretax net losses on cash flow hedges from accumulated other comprehensive loss to other–net, (income) expense. Fair Value of Financial Instruments The following tables summarize certain fair value information at September 30, 2018 and December 31, 2017 for assets and liabilities measured at fair value on a recurring basis, as well as the carrying amount and amortized cost of certain other investments:
(1) For available-for-sale debt securities, amounts disclosed represent the securities' amortized cost. (2) Fair value disclosures are not applicable for equity method investments and investments accounted for under the measurement alternative for equity investments that do not have readily determinable fair values.
(1) Contingent consideration liabilities primarily relate to the Erbitux arrangement with BMS discussed in Note 4. Risk-management instruments above are disclosed on a gross basis. There are various rights of setoff associated with certain of the risk-management instruments above that are subject to an enforceable master netting arrangement or similar agreements. Although various rights of setoff and master netting arrangements or similar agreements may exist with the individual counterparties to the risk-management instruments above, individually, these financial rights are not material. We determine our Level 1 and Level 2 fair value measurements based on a market approach using quoted market values, significant other observable inputs for identical or comparable assets or liabilities, or discounted cash flow analyses. Level 3 fair value measurements for other investment securities are determined using unobservable inputs, including the investments' cost adjusted for impairments and price changes from orderly transactions. The fair values of equity method investments and investments measured under the measurement alternative for equity investments that do not have readily determinable fair values are not readily available. Contingent consideration liabilities at December 31, 2017 primarily include contingent consideration related to Erbitux, for which the fair value was estimated using a discounted cash flow analysis and Level 3 inputs, including projections representative of a market participant view for net sales in North America through September 2018 and an estimated discount rate. The amount to be paid is calculated as a tiered percentage of net sales (see Note 4) and will, therefore, vary directly with increases and decreases in net sales of Erbitux in North America. There is no cap on the amount that may be paid pursuant to this arrangement. The decrease in the fair value of the contingent consideration liabilities during the nine months ended September 30, 2018 was due primarily to cash payments of $155.4 million related to Erbitux. The change in the fair value of the contingent consideration liabilities recognized in earnings during the three and nine months ended September 30, 2018 and 2017 due to changes in time value of money was not material. The table below summarizes the contractual maturities of our investments in debt securities measured at fair value as of September 30, 2018:
A summary of the fair value of available-for-sale securities in an unrealized gain or loss position and the amount of unrealized gains and losses (pretax) in accumulated other comprehensive loss follows:
A summary of the unrealized gains and losses (pretax) recognized in our consolidated condensed statements of operations for equity securities held as of September 30, 2018 is as follows:
We periodically assess our investment in available-for-sale securities for other-than-temporary impairment losses. There were no other-than-temporary impairment losses in the three or nine months ended September 30, 2018 or the three or nine months ended September 30, 2017. We periodically assess our investments in equity securities other than public equity securities for impairment losses. Impairment losses recognized on these equity securities in the three and nine months ended September 30, 2018 were immaterial. For fixed-income securities, the amount of credit losses are determined by comparing the difference between the present value of future cash flows expected to be collected on these securities and the amortized cost. Factors considered in assessing credit losses include the position in the capital structure, vintage and amount of collateral, delinquency rates, current credit support, and geographic concentration. For equity securities, factors considered in assessing impairment losses include the financial condition and near term prospects of the issuer and general market conditions and industry specific factors. As of September 30, 2018, the available-for-sale securities in an unrealized loss position include primarily fixed-rate debt securities of varying maturities, which are sensitive to changes in the yield curve and other market conditions. Approximately 60 percent of the fixed-rate debt securities in a loss position are investment-grade debt securities. As of September 30, 2018, we do not intend to sell, and it is not more likely than not that we will be required to sell the securities in a loss position before the market values recover or the underlying cash flows have been received, and there is no indication of default on interest or principal payments for any of our debt securities. Activity related to our investment portfolio, substantially all of which related to equity and available-for-sale securities, was as follows:
Realized gains and losses on sales of available-for-sale investments are computed based upon specific identification of the initial cost adjusted for any other-than-temporary declines in fair value that were recorded in earnings. Adjustments recorded to our equity investments without readily determinable fair values are based upon changes in the equity instrument's value resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Downward adjustments resulting from an impairment are recorded based upon the impairment considerations mentioned above. Adjustments recorded during the nine months ended September 30, 2018 were immaterial. Accounts Receivable Factoring Arrangements We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over and risk related to the receivables to the buyers. Our factoring agreements do not allow for recourse in the event of uncollectibility, and we do not retain any interest in the underlying accounts receivable once sold. We derecognized $645.1 million and $723.2 million of accounts receivable as of September 30, 2018 and December 31, 2017, respectively, under these factoring arrangements. The cost of factoring such accounts receivable on our consolidated condensed results of operations for the nine months ended September 30, 2018 and 2017 was not material. |
Income Taxes |
9 Months Ended |
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Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates were 18.5 percent and 26.2 percent for the three and nine months ended September 30, 2018, respectively, compared with 6.1 percent and 24.1 percent for the three and nine months ended September 30, 2017. The increase in the effective tax rate for the third quarter of 2018 is primarily due to a higher income tax benefit in the third quarter of 2017 for acquired IPR&D charges and asset impairment, restructuring, and other special charges. The increase in the effective rate for the first nine months of 2018 is primarily due to the $1.56 billion non-deductible acquired IPR&D charge related to the acquisitions of ARMO and AurKa. In December 2017, the President of the U.S. signed into law the Tax Cuts and Jobs Act (2017 Tax Act), which includes significant changes to the U.S. corporate income tax system, including a reduction in the corporate income tax rate, transition to a territorial tax system, and modifications to the international tax provisions. The changes that became effective January 1, 2018 resulted in a reduction to our tax expense for the three and nine months ended September 30, 2018 compared to the three and nine months ended September 30, 2017, respectively. At September 30, 2018, our accounting for the 2017 Tax Act is incomplete; however, we expect to complete our accounting by December 2018. As discussed in our 2017 Annual Report on Form 10-K, we recorded provisional adjustments for effects that we were able to reasonably estimate. Those effects included the one-time repatriation transition tax (also known as the 'Toll Tax'), re-measurement of deferred tax assets and liabilities, unremitted earnings, executive compensation, and uncertain tax positions. At year-end, we were not able to make reasonable estimates for Global Intangible Low-Taxed Income (GILTI) deferred taxes or valuation allowances; therefore, we did not record provisional amounts. We are still evaluating the effects of the GILTI provisions and assessing our valuation allowances, and we have not yet determined our accounting policy election with respect to GILTI deferred taxes or the application of intra-entity transfers of inventory; therefore, the estimated annual effective tax rate reflects GILTI as a period expense. For the three and nine months ended September 30, 2018, we increased our provisional amount of Toll Tax by an immaterial amount. We have not made any additional measurement-period adjustments related to the other provisional items as we are continuing to collect and analyze additional information as well as evaluate the interpretations and assumptions made. Updates to our calculations may result in material changes to the provisional adjustments recorded at year-end and the estimated annual effective tax rate. The U.S. examination of tax years 2013-2015 began in 2016. While we believe it is reasonably possible that this audit could reach resolution within the next 12 months, the IRS examination of tax years 2013-2015 remains ongoing. Therefore, it is not possible to reasonably estimate the change to unrecognized tax benefits and the related future cash flows. |
Retirement Benefits |
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Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Retirement Benefits | Retirement Benefits Net pension and retiree health benefit (income) cost included the following components:
In July 2018, we announced that we would amend our defined benefit pension and retiree health benefit plans to freeze or reduce benefits for certain Elanco employees effective January 1, 2019. We remeasured the impacted pension and retiree health plans’ benefit obligations as of July 31, 2018, which resulted in a net curtailment gain of $28.0 million during the three and nine months ended September 30, 2018, which was recorded as a component of asset impairment, restructuring, and other special charges. We contributed approximately $35 million required to satisfy minimum funding requirements to our defined benefit pension and retiree health benefit plans during the nine months ended September 30, 2018. Additional discretionary funding totaled $200.0 million during the nine months ended September 30, 2018. During the remainder of 2018, we expect to make contributions to our defined benefit pension and retiree health benefit plans of approximately $15 million to satisfy minimum funding requirements. No additional discretionary funding for the remainder of 2018 is planned. As discussed in Note 2, upon adoption of Accounting Standards Update 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, pension and retiree health benefit cost components other than service costs are presented in other–net, (income) expense. |
Contingencies |
9 Months Ended |
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Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies We are a party to various legal actions and government investigations. The most significant of these are described below. It is not possible to determine the outcome of these matters, and we cannot reasonably estimate the maximum potential exposure or the range of possible loss in excess of amounts accrued for any of these matters; however, we believe that, except as noted below with respect to the Alimta® patent litigation and administrative proceedings, the resolution of all such matters will not have a material adverse effect on our consolidated financial position or liquidity, but could possibly be material to our consolidated results of operations in any one accounting period. Alimta Patent Litigation and Administrative Proceedings A number of generic manufacturers are seeking approvals in the U.S., Japan, and a number of countries in Europe to market generic forms of Alimta prior to the expiration of our vitamin regimen patents, alleging that those patents are invalid, not infringed, or both. We believe our Alimta vitamin regimen patents are valid and enforceable against these generic manufacturers. However, it is not possible to determine the ultimate outcome of the proceedings, and accordingly, we can provide no assurance that we will prevail. An unfavorable outcome could have a material adverse impact on our future consolidated results of operations, liquidity, and financial position. We expect that a loss of exclusivity for Alimta would result in a rapid and severe decline in future revenue for the product in the relevant market. U.S. Patent Litigation and Administrative Proceedings In the U.S., more than 10 Abbreviated New Drug Applications (ANDAs) seeking approval to market generic versions of Alimta prior to the expiration of our vitamin regimen patent (expiring in 2021 plus pediatric exclusivity expiring in 2022) have been filed by a number of companies, including Teva Parenteral Medicines, Inc. (Teva) and APP Pharmaceuticals, LLC (APP) pursuant to procedures set out in the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act). We have received favorable decisions from the U.S. Court of Appeals for the Federal Circuit (affirming the U.S. District Court for the Southern District of Indiana's decisions finding our U.S. vitamin regimen patent valid and infringed) against Teva, APP, and two other defendants' proposed products, and similar favorable judgments have been entered by the U.S. District Court for the Southern District of Indiana against five other companies. The remaining ANDA applicants have agreed to a preliminary injunction or stay pending the appeal of the inter partes review (IPR) described in the following sentence. In October 2017, the U.S. Patent and Trademark Office issued written decisions in our favor following IPR of our vitamin regimen patent, finding that the generic company petitioners failed to show that the claims in our patent are unpatentable. A number of these challengers have filed an appeal. We currently have pending lawsuits in the U.S. District Court for the Southern District of Indiana alleging infringement against Actavis LLC (Actavis) and Apotex Inc. in response to their applications to market alternative forms of pemetrexed (the active ingredient in Alimta) products, and we filed a similar lawsuit in the U.S. District Court for Delaware against Eagle Pharmaceuticals, Inc. In June 2018, the U.S. District Court for the Southern District of Indiana ruled in our favor in two similar cases, finding Dr. Reddy's Laboratories' (Dr. Reddy) and Hospira, Inc.'s (Hospira) proposed products would infringe our patent. Dr. Reddy and Hospira have appealed those rulings. The lawsuit against Actavis has been stayed, pending a decision in the Dr. Reddy and Hospira appeals. European Patent Litigation and Administrative Proceedings In July 2017, the United Kingdom (U.K.) Supreme Court ruled that commercialization of certain salt forms of pemetrexed by Actavis Group ehf and other Actavis companies directly infringes our vitamin regimen patents in the U.K., Italy, France, and Spain. This litigation in the U.K. is now concluded. Hexal AG (Hexal) and Stada Arzneimittel AG (Stada) have each challenged the validity of our vitamin regimen patent before the German Federal Patent Court. At a hearing in July 2018, the German Federal Patent Court held that our vitamin regimen patent is invalid. We have appealed this decision. Under German law, the patent remains in force pending appeal. A number of generic competitors have received approval to market generic versions of pemetrexed in Germany and may choose to launch at risk. We will seek to remove any generic pemetrexed products launched at risk in Germany, seek damages in respect of such launches, and defend our patent. Injunctions are in place against four of these companies, including Hexal and ratiopharm GmbH (a subsidiary of Teva). Stada has recently launched at risk in Germany and we are seeking an injunction. Whether further injunctions are granted or the current injunctions are maintained pending the appeal, or whether a generic competitor chooses to launch at risk, makes the timing of possible generic entry and market erosion in Germany unpredictable. Additional legal proceedings are ongoing in various national courts throughout Europe. We are aware that several companies have received approval to market generic versions of pemetrexed in major European markets and that generic competitors may choose to launch at risk (including one generic product currently on the market in France). We will continue to seek to remove any generic pemetrexed products launched at risk in European markets, seek damages in respect of such launches, and defend our patents against validity challenges. Japanese Administrative Proceedings Three separate sets of demands for invalidation of our two vitamin regimen patents, involving several companies, have been filed with the Japanese Patent Office (JPO). In February 2017, the Japan Intellectual Property High Court confirmed the decisions of the JPO upholding the validity of both our Japanese vitamin regimen patents in the challenge initiated by Sawai Pharmaceutical Co., Ltd. and joined by three other companies. This decision is now final. In May 2017, the JPO resumed one of the two remaining sets of demands, brought by Nipro Corporation (Nipro) and in July 2018, the JPO issued written decisions dismissing Nipro’s invalidation demands. Nipro filed an appeal and we anticipate decisions by the Japan Intellectual Property High Court in the third quarter of 2019. The other set of demands, brought by Hospira, that were previously suspended resumed in August 2018; we anticipate decisions by the JPO in the second quarter of 2019. If upheld through all challenges, these patents provide intellectual property protection for Alimta until June 2021. Notwithstanding our patents, generic versions of Alimta were approved in Japan starting in February 2016. We do not currently anticipate that generic versions of Alimta will proceed to pricing approval. Cymbalta® Product Liability Litigation We were named as a defendant in a purported class-action lawsuit in the U.S. District Court for the Central District of California (now called Strafford et al. v. Eli Lilly and Company) involving Cymbalta. The plaintiffs, purporting to represent a class of all persons within the U.S. who purchased and/or paid for Cymbalta, asserted claims under the consumer protection statutes of four states, California, Massachusetts, Missouri, and New York, and sought declaratory, injunctive, and monetary relief for various alleged economic injuries arising from discontinuing treatment with Cymbalta. The district court denied the plaintiffs' motions for class certification. The district court dismissed the suits and plaintiffs appealed to the U.S. Court of Appeals for the Ninth Circuit. In November 2017, the U.S. Court of Appeals for the Ninth Circuit dismissed the suit. In July 2018, the U.S. District Court for the District of California denied plaintiffs’ motion to reopen the case. Plaintiffs’ appeal of this denial is currently pending before the U.S. Court of Appeals for the Ninth Circuit. We are named in approximately 140 lawsuits involving approximately 1,470 plaintiffs filed in various federal and state courts alleging injuries arising from discontinuation of treatment with Cymbalta. These include approximately 40 individual and multi-plaintiff cases filed in California state court, centralized in a California Judicial Counsel Coordination Proceeding pending in Los Angeles. The first individual product liability cases were tried in August 2015 and resulted in defense verdicts against four plaintiffs. We believe all these Cymbalta lawsuits and claims are without merit. We have reached a settlement framework that provides for a comprehensive resolution of nearly all of these personal injury claims, filed or unfiled, alleging injuries from discontinuing treatment with Cymbalta. Brazil–Employee Litigation Our subsidiary in Brazil, Eli Lilly do Brasil Limitada (Lilly Brasil), is named in a lawsuit brought by the Labor Attorney for the 15th Region in the Labor Court of Paulinia, State of Sao Paulo, Brazil, alleging possible harm to employees and former employees caused by exposure to heavy metals at a former Lilly Brasil manufacturing facility in Cosmopolis, Brazil, operated by the company between 1977 and 2003. The plaintiffs allege that some employees at the facility were exposed to benzene and heavy metals; however, Lilly Brasil maintains that these alleged contaminants were never used in the facility. In May 2014, the labor court judge ruled against Lilly Brasil. The judge's ruling orders Lilly Brasil to undertake several actions of unspecified financial impact, including paying lifetime medical insurance for the employees and contractors who worked at the Cosmopolis facility more than six months during the affected years and their children born during and after this period. We filed an appeal in May 2014. In July 2018, the appeals court affirmed the lower court's ruling with the total financial impact of the ruling estimated to be approximately 500 million Brazilian real (approximately $125 million as of September 30, 2018). The appeals court restricted the broad health coverage awarded by the lower court to health problems that claimants could show arose from exposure to the alleged contamination. We strongly disagree with the court's decision and plan to appeal. Lilly Brasil has taken an initial step in the appeal process by filing a Motion for Clarification; a decision on that motion is expected late in the fourth quarter of 2018 or in the first quarter of 2019. We are also named in approximately 30 lawsuits filed in the same court by individual former employees making similar claims. Lilly Brasil and Elanco Quimica Ltda. have been named in a lawsuit involving approximately 305 individuals alleging that the companies failed to provide warnings regarding exposure to heavy metals or proper equipment at the former Cosmopolis facility, and that this alleged failure could result in possible harm to employees, former employees, and their dependents. In June 2017, the court denied the plaintiffs' request for a preliminary injunction. In September 2017, the court dismissed the claims brought by all but the first named plaintiff. The plaintiffs are appealing that decision. Lilly Brasil and Elanco Quimica Ltda. have also been named in a separate lawsuit involving approximately 105 individuals alleging that the companies failed to provide warnings regarding exposure to heavy metals or proper equipment at the former Cosmopolis facility, and that this alleged failure could result in possible harm to contractors and suppliers, and their dependents. In November 2017, the court dismissed the claims brought by all but the first named plaintiff. The plaintiffs are appealing that decision. We believe all of these lawsuits are without merit and plan to defend against them vigorously. Agri Stats, Inc. During the third quarter, we sold Agri Stats, Inc., one of our subsidiaries. As a result of the sale, we no longer hold the liability for litigation in which Agri Stats is named as a party, including the approximately 25 antitrust suits filed in the U.S. District Court for the Northern District of Illinois and the District of Minnesota alleging that defendants engaged in a conspiracy to limit U.S. chicken and swine production and inflate prices. Adocia, S.A. We have been named a respondent in two arbitrations filed by Adocia, S.A. (Adocia), with which we entered into agreements for the co-development of an ultra-rapid insulin product. In the first arbitration, Adocia alleged that we failed to make a $11.7 million milestone payment and, in August 2018, an arbitration panel ruled in favor of Adocia. In the second arbitration, Adocia alleged that we misappropriated and misused Adocia's confidential information and intellectual property and is seeking approximately $1.8 billion in damages and other specific relief. We believe these claims are without merit and are defending against them vigorously. We have asserted several counterclaims relating to fraudulent misrepresentation and are seeking approximately $188 million in damages. Throughout the arbitrations described above, Adocia has made statements alleging that Adocia employees should be listed as inventors on two of our patents related to our ultra-rapid insulin product currently in development. We strongly contest this allegation. While inventorship of these two patents is not at issue in the arbitrations, in October 2018 we filed a declaratory judgment action against Adocia in the U.S. District Court for the Southern District of Indiana to confirm our inventorship. Product Liability Insurance Because of the nature of pharmaceutical products, it is possible that we could become subject to large numbers of product liability and related claims in the future. Due to a very restrictive market for product liability insurance, we are self-insured for product liability losses for all our currently marketed products. |
Other Comprehensive Income (Loss) |
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Statement of Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | Other Comprehensive Income (Loss) The following tables summarize the activity related to each component of other comprehensive income (loss) during the three months ended September 30, 2018 and 2017:
The following tables summarize the activity related to each component of other comprehensive income (loss) during the nine months ended September 30, 2018 and 2017:
(1) Accumulated other comprehensive loss as of September 30, 2017 consists of $4.61 billion of accumulated other comprehensive loss attributable to controlling interest and $34.8 million of accumulated other comprehensive income attributable to noncontrolling interest. (2) Accumulated other comprehensive loss as of January 1, 2018 consists of $5.72 billion of accumulated other comprehensive loss attributable to controlling interest and $23.7 million of accumulated other comprehensive income attributable to noncontrolling interest. Accumulated other comprehensive loss as of January 1, 2017 consists of $5.27 billion of accumulated other comprehensive loss attributable to controlling interest and $48.2 million of accumulated other comprehensive income attributable to noncontrolling interest. (3) This reclassification consists of $104.8 million of accumulated other comprehensive loss attributable to controlling interest and $24.1 million of accumulated other comprehensive loss attributable to noncontrolling interest. Refer to Note 2 for further details regarding the reclassification due to the adoption of Accounting Standards Update 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. (4) Accumulated other comprehensive loss as of September 30, 2018 consists of $5.44 billion of accumulated other comprehensive loss attributable to controlling interest and $9.0 million of accumulated other comprehensive loss attributable to noncontrolling interest. The tax effects on the net activity related to each component of other comprehensive income (loss) were as follows:
Except for the tax effects of foreign currency translation gains and losses related to our foreign currency-denominated notes, cross-currency interest rate swaps, and other foreign currency exchange contracts designated as net investment hedges (see Note 6), income taxes were not provided for foreign currency translation. Generally, the assets and liabilities of foreign operations are translated into U.S. dollars using the current exchange rate. For those operations, changes in exchange rates generally do not affect cash flows; therefore, resulting translation adjustments are made in shareholders' equity rather than in the consolidated condensed statements of operations. Reclassifications out of accumulated other comprehensive loss were as follows:
(1) These accumulated other comprehensive loss components are included in the computation of net periodic benefit (income) cost (see Note 8). |
Other-Net, (Income) Expense |
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Nonoperating Income (Expense) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Other - Net, (Income) Expense | Other–Net, (Income) Expense Other–net, (income) expense consisted of the following:
As discussed in Note 2, upon adoption of Accounting Standards Update 2017-07, Compensation-Retirement Benefits: Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost, pension and postretirement benefit cost components other than service costs are presented in other–net, (income) expense. Results for the three and nine months ended September 30, 2017 have been reclassified to reflect the adoption of this standard. |
Segment Information |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Information | Segment Information We have two operating segments—human pharmaceutical products and animal health products. Our operating segments are distinguished by the ultimate end user of the product—humans or animals. Performance is evaluated based on profit or loss from operations before income taxes.
Numbers may not add due to rounding. (1) U.S. revenue includes revenue in Puerto Rico.
Numbers may not add due to rounding. For internal management reporting presented to the chief operating decision maker, certain costs are fully allocated to our human pharmaceutical products segment and therefore are not reflected in the animal health segment's profit. Such items include costs associated with treasury-related financing and global administrative services.
Numbers may not add due to rounding. (1) Revenue is attributed to the countries based on the location of the customer. Refer to Note 3 for information regarding the IPO of Elanco. |
Implementation of New Financial Accounting Pronouncements (Policies) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements |
The following table provides a brief description of the accounting standard that has not yet been adopted and could have a material effect on our financial statements:
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Divestiture and Acquisitions (Policies) |
9 Months Ended |
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Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Business Combinations Policy | Upon acquisition, the acquired in-process research and development (IPR&D) charges related to these products were immediately expensed because the products had no alternative future use. Under this method, the assets acquired and liabilities assumed were recorded at their respective fair values as of the acquisition date in our consolidated financial statements. The determination of estimated fair value required management to make significant estimates and assumptions. The excess of the purchase price over the fair value of the acquired net assets, where applicable, has been recorded as goodwill. The results of operations of this acquisition have been included in our consolidated condensed financial statements from the date of acquisition. |
Financial Instruments (Policies) |
9 Months Ended |
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Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Description of Derivative Risk Management Policy | Our derivative activities are initiated within the guidelines of documented corporate risk-management policies and are intended to offset losses and gains on the assets, liabilities, and transactions being hedged. Management reviews the correlation and effectiveness of our derivatives on a quarterly basis. For derivative instruments that are designated and qualify as fair value hedges, the derivative instrument is marked to market, with gains and losses recognized currently in income to offset the respective losses and gains recognized on the underlying exposure. For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of gains and losses is reported as a component of accumulated other comprehensive loss and reclassified into earnings in the same period the hedged transaction affects earnings. For derivative and non-derivative instruments that are designated and qualify as net investment hedges, the effective portion of foreign currency translation gains or losses due to spot rate fluctuations are reported as a component of accumulated other comprehensive loss. Hedge ineffectiveness is immediately recognized in earnings. Derivative contracts that are not designated as hedging instruments are recorded at fair value with the gain or loss recognized in current earnings during the period of change. We may enter into foreign currency forward or option contracts to reduce the effect of fluctuating currency exchange rates (principally the euro, British pound, and the Japanese yen). Foreign currency derivatives used for hedging are put in place using the same or like currencies and duration as the underlying exposures. Forward and option contracts are principally used to manage exposures arising from subsidiary trade and loan payables and receivables denominated in foreign currencies. These contracts are recorded at fair value with the gain or loss recognized in other–net, (income) expense. We may enter into foreign currency forward and option contracts and currency swaps as fair value hedges of firm commitments. Forward contracts generally have maturities not exceeding 12 months. |
Basis of Presentation and Revenue Basis of Presentation and Revenue (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue recognized in our consolidated condensed statements of operations | The following table summarizes our revenue recognized in our consolidated condensed statements of operations:
(1) Collaboration and other revenue associated with prior year transfers of intellectual property was $76.2 million and $258.4 million during the three and nine months ended September 30, 2018, respectively, and $36.7 million and $105.5 million during the three and nine months ended September 30, 2017, respectively. |
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Schedule of amounts recorded for contract liabilities | We have the following amounts recorded for contract liabilities:
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Implementation of New Accounting Pronouncements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The following table provides a brief description of accounting standards that were effective January 1, 2018 and were adopted on that date:
The following table provides a brief description of the accounting standard that has not yet been adopted and could have a material effect on our financial statements:
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Divestiture and Acquisitions (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of asset acquisition | The following table and narrative summarize our asset acquisitions during the nine months ended September 30, 2018 and September 30, 2017.
(1) The phase of development presented is as of the date of the arrangement and represents the phase of development of the most advanced asset acquired, where applicable. |
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Boehringer Ingelheim Vetmedica, Inc.'s U.S. Vaccine Portfolio | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of the amounts recognized for assets acquired and liabilities assumed as of the acquisition date | The following table summarizes the amounts recognized for assets acquired and liabilities assumed as of the acquisition date:
(1) These intangible assets, which are being amortized to cost of sales on a straight-line basis over their estimated useful lives, were expected to have a weighted average useful life of 10 years. (2) The goodwill recognized from this acquisition is attributable primarily to expected synergies from combining the operations of BIVIVP with our legacy animal health business, future unidentified projects and products, and the assembled workforce of BIVIVP. The goodwill associated with this acquisition is deductible for tax purposes. |
Collaborations and Other Arrangements (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue recognized | tones. The following table summarizes our milestones achieved:
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Schedule of exclusive marketing rights in certain other territories. | We and Daiichi Sankyo each have exclusive marketing rights in certain other territories.
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Diabetes Collaboration | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue recognized | The table below summarizes significant regulatory and commercialization events and milestones (deferred) capitalized for the compounds included in this collaboration:
(1) In connection with the regulatory approvals of Basaglar in the U.S., Europe, and Japan, milestone payments received were recorded as contract liabilities and are being amortized through the term of the collaboration (2029) to collaboration and other revenue. In connection with the regulatory approvals of Trajenta and Jardiance, milestone payments made were capitalized as intangible assets and are being amortized to cost of sales through the term of the collaboration. (2) Jentadueto is included in the Trajenta product family. The collaboration agreement with Boehringer Ingelheim for Trajenta ends upon expiration of the compound patent and any supplementary protection certificates or extensions thereto. (3) Glyxambi and Synjardy are included in the Jardiance product family. The collaboration agreement with Boehringer Ingelheim for Jardiance ends upon expiration of the compound patent and any supplementary protection certificates or extensions thereto. (4) The cumulative amount represents the total initial amounts that were (deferred) or capitalized from the start of this collaboration through the end of the reporting period. |
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Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue recognized | The following table summarizes our collaboration and other revenue recognized with respect to the Trajenta and Jardiance families of products and net product revenue recognized with respect to Basaglar:
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Erbitux | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue recognized | The following table summarizes our revenue recognized with respect to Erbitux:
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Effient | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue recognized | The following table summarizes our revenue recognized with respect to Effient:
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Asset Impairment, Restructuring, and Other Special Charges (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Restructuring and Related Activities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The components of the charges included in asset impairment, restructuring, and other special charges | The components of the charges included in asset impairment, restructuring, and other special charges in our consolidated condensed statements of operations are described below.
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Financial Instruments (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of effects of risk-management instruments were recognized in other–net, (income) expense | The following effects of risk-management instruments were recognized in other–net, (income) expense:
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Schedule of effective portion of risk-management instruments that was recognized in other comprehensive income (loss) | The effective portion of risk-management instruments that was recognized in other comprehensive income (loss) is as follows:
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Summary certain fair value information | The following tables summarize certain fair value information at September 30, 2018 and December 31, 2017 for assets and liabilities measured at fair value on a recurring basis, as well as the carrying amount and amortized cost of certain other investments:
(1) For available-for-sale debt securities, amounts disclosed represent the securities' amortized cost. (2) Fair value disclosures are not applicable for equity method investments and investments accounted for under the measurement alternative for equity investments that do not have readily determinable fair values. |
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Summary certain fair value information, liabilities |
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Fair value, by balance sheet grouping |
(1) Contingent consideration liabilities primarily relate to the Erbitux arrangement with BMS discussed in Note 4. |
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Summary the contractual maturities of our investments in debt securities measured at fair value | A summary of the fair value of available-for-sale securities in an unrealized gain or loss position and the amount of unrealized gains and losses (pretax) in accumulated other comprehensive loss follows:
The table below summarizes the contractual maturities of our investments in debt securities measured at fair value as of September 30, 2018:
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Summary of the amount of unrealized gains and losses (pretax) recognized in our statement of operations for equity securities | A summary of the unrealized gains and losses (pretax) recognized in our consolidated condensed statements of operations for equity securities held as of September 30, 2018 is as follows:
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Activity related to our investment portfolio, substantially all of which related to equity and available-for-sale securities | Activity related to our investment portfolio, substantially all of which related to equity and available-for-sale securities, was as follows:
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Retirement Benefits (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Defined Benefit Pension Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net pension and retiree health benefit (income) cost | Net pension and retiree health benefit (income) cost included the following components:
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Retiree Health Benefit Plans | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net pension and retiree health benefit (income) cost |
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Other Comprehensive Income (Loss) (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Statement of Comprehensive Income [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of components of other comprehensive income (loss) | The following tables summarize the activity related to each component of other comprehensive income (loss) during the three months ended September 30, 2018 and 2017:
The following tables summarize the activity related to each component of other comprehensive income (loss) during the nine months ended September 30, 2018 and 2017:
(1) Accumulated other comprehensive loss as of September 30, 2017 consists of $4.61 billion of accumulated other comprehensive loss attributable to controlling interest and $34.8 million of accumulated other comprehensive income attributable to noncontrolling interest. (2) Accumulated other comprehensive loss as of January 1, 2018 consists of $5.72 billion of accumulated other comprehensive loss attributable to controlling interest and $23.7 million of accumulated other comprehensive income attributable to noncontrolling interest. Accumulated other comprehensive loss as of January 1, 2017 consists of $5.27 billion of accumulated other comprehensive loss attributable to controlling interest and $48.2 million of accumulated other comprehensive income attributable to noncontrolling interest. (3) This reclassification consists of $104.8 million of accumulated other comprehensive loss attributable to controlling interest and $24.1 million of accumulated other comprehensive loss attributable to noncontrolling interest. Refer to Note 2 for further details regarding the reclassification due to the adoption of Accounting Standards Update 2016-01, Financial Instruments - Overall: Recognition and Measurement of Financial Assets and Financial Liabilities. (4) Accumulated other comprehensive loss as of September 30, 2018 consists of $5.44 billion of accumulated other comprehensive loss attributable to controlling interest and $9.0 million of accumulated other comprehensive loss attributable to noncontrolling interest. The tax effects on the net activity related to each component of other comprehensive income (loss) were as follows:
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Schedule of reclassifications out of accumulated other comprehensive loss | Reclassifications out of accumulated other comprehensive loss were as follows:
(1) These accumulated other comprehensive loss components are included in the computation of net periodic benefit (income) cost (see Note 8). |
Other - Net, (Income) Expense (Tables) |
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Nonoperating Income (Expense) [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of other–net, (income) expense | Other–net, (income) expense consisted of the following:
|
Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of segment reporting information, by segment |
Numbers may not add due to rounding. (1) U.S. revenue includes revenue in Puerto Rico.
Numbers may not add due to rounding. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of revenue from external customers and long-lived assets, by geographical areas |
Numbers may not add due to rounding. (1) Revenue is attributed to the countries based on the location of the customer. |
Basis of Presentation and Revenue Basis of Presentation and Revenue (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 6,061.9 | $ 5,658.0 | $ 18,117.1 | $ 16,710.6 | |
Payment term, minimum (in days) | 30 days | ||||
Payment term, maximum (in days) | 75 days | ||||
Contract liabilities | 308.6 | $ 308.6 | $ 335.2 | ||
Product | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 5,664.5 | 5,323.8 | 16,905.6 | 15,841.5 | |
Collaboration and Other Revenue | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 397.4 | 334.2 | 1,211.5 | 869.1 | |
Royalty | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 76.2 | $ 36.7 | $ 258.4 | $ 105.5 |
Implementation of New Financial Accounting Pronouncements (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Jan. 01, 2018 |
Dec. 31, 2017 |
|
Concentration Risk [Line Items] | ||||||
Accumulated other comprehensive loss | $ 5,439.5 | $ 5,439.5 | $ 5,718.6 | |||
Retained earnings | 14,408.7 | 14,408.7 | 13,894.1 | |||
Increase to deferred tax assets upon adoption | 3,132.3 | 3,132.3 | $ 1,166.4 | |||
Other, net | (15.4) | $ 49.9 | 90.1 | $ 188.6 | ||
Cost of sales | 1,562.3 | 1,586.3 | 4,836.3 | 4,505.9 | ||
Marketing, selling, and administrative | 1,616.6 | 1,578.5 | 4,770.3 | 4,876.6 | ||
Research and development | $ 1,343.3 | 1,340.0 | $ 3,853.3 | 3,870.4 | ||
Accounting Standards Update 2016-01 | ||||||
Concentration Risk [Line Items] | ||||||
Accumulated other comprehensive loss | $ 105.0 | |||||
Retained earnings | 105.0 | |||||
Accounting Standards Update 2016-16 | ||||||
Concentration Risk [Line Items] | ||||||
Retained earnings | 2,500.0 | |||||
Increase to deferred tax assets upon adoption | 2,500.0 | |||||
Accounting Standards Update 2017-07 | ||||||
Concentration Risk [Line Items] | ||||||
Other, net | 63.8 | 191.3 | ||||
Cost of sales | 20.2 | 60.5 | ||||
Marketing, selling, and administrative | 23.0 | 69.0 | ||||
Research and development | $ 20.6 | $ 61.8 | ||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09 | ||||||
Concentration Risk [Line Items] | ||||||
Retained earnings | $ 5.0 |
Divestiture and Acquisitions (Formation of Elanco and IPO) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions |
Sep. 24, 2018 |
Sep. 30, 2018 |
Dec. 31, 2017 |
Sep. 30, 2017 |
Dec. 31, 2016 |
---|---|---|---|---|---|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash and cash equivalents | $ 8,960.0 | $ 6,536.2 | $ 3,724.3 | $ 4,582.1 | |
Noncontrolling interests | 1,074.3 | $ 75.7 | |||
Elanco Animal Health Incorporated | Spin-off | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Cash Transfered From Subsidiary to Parent | $ 4,200.0 | ||||
Sale of Elanco stock (Note 3) | $ 629.2 | ||||
Elanco Animal Health Incorporated | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Percentage of ownership sold (percentage) | 19.80% | ||||
Cash and cash equivalents | 300.0 | ||||
Noncontrolling interests | $ 1,020.0 | ||||
Elanco Animal Health Incorporated | IPO | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of shares sold (shares) | 72.3 | ||||
Price per share sold (usd per share) | $ 24 |
Divestiture and Acquisitions (Acquisitions) (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | |||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2018 |
Oct. 31, 2018 |
Jul. 31, 2018 |
Jun. 30, 2018 |
Apr. 30, 2018 |
Aug. 31, 2017 |
Jul. 31, 2017 |
Mar. 31, 2017 |
Jan. 31, 2017 |
Dec. 31, 2018 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 30.0 | $ 205.0 | $ 1,654.5 | $ 1,062.6 | ||||||||||
Purchase of in-process research and development | $ 1,578.2 | $ 1,036.8 | ||||||||||||
Boehringer Ingelheim Vetmedica, Inc.'s U.S. Vaccine Portfolio | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
All cash transaction | $ 882.1 | |||||||||||||
Useful life (years) | 10 years | |||||||||||||
Sigilon Therapeutics (Sigilon) | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 66.9 | |||||||||||||
Purchase of in-process research and development | $ 62.5 | |||||||||||||
AurKa Pharma, Inc. (AurKa) | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 81.8 | |||||||||||||
Purchase of in-process research and development | 81.3 | |||||||||||||
Value of liabilities assumed | 0.5 | |||||||||||||
ARMO Biosciences, Inc. (ARMO) | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | 1,475.8 | |||||||||||||
Purchase of in-process research and development | 1,400.0 | |||||||||||||
Value of liabilities assumed | $ 75.8 | |||||||||||||
Anima Biotech (Anima) | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 30.0 | |||||||||||||
CoLucid Pharmaceuticals, Inc. (CoLucid) | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 857.6 | |||||||||||||
Purchase of in-process research and development | 831.8 | |||||||||||||
Value of liabilities assumed | $ 25.8 | |||||||||||||
KeyBioscience AG (KeyBioscience) | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 55.0 | |||||||||||||
Nektar Therapeutics (Nektar) | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 150.0 | |||||||||||||
Scenario, Forecast | Chugai Pharmaceutical Company | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 50.0 | |||||||||||||
Purchase of in-process research and development | 50.0 | |||||||||||||
Scenario, Forecast | Priority Review Voucher | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | 80.0 | |||||||||||||
All cash transaction | $ 80.0 | |||||||||||||
Scenario, Forecast | NextCure, Inc. | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 30.0 | |||||||||||||
Purchase of in-process research and development | $ 25.0 | |||||||||||||
Subsequent Event | Dicerna Pharmaceuticals | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Acquired in-process research and development | $ 135.0 | |||||||||||||
Purchase of in-process research and development | $ 100.0 |
Divestiture and Acquisitions (Purchased Price) (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
Jan. 03, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Goodwill | $ 4,358.4 | $ 4,370.1 | |
Boehringer Ingelheim Vetmedica, Inc.'s U.S. Vaccine Portfolio | |||
Business Acquisition [Line Items] | |||
Inventories | $ 108.6 | ||
Marketed products | 297.0 | ||
Property and equipment | 148.2 | ||
Other assets and liabilities - net | 8.2 | ||
Total identifiable net assets | 562.0 | ||
Goodwill | 320.1 | ||
Total consideration transferred - net of cash acquired | $ 882.1 |
Collaborations and Other Arrangements (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | 12 Months Ended | 24 Months Ended | 36 Months Ended | 72 Months Ended | |||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
Dec. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2016 |
Dec. 31, 2016 |
|
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | $ 6,061.9 | $ 5,658.0 | $ 18,117.1 | $ 16,710.6 | |||||
Research and development | 1,343.3 | 1,340.0 | $ 3,853.3 | 3,870.4 | |||||
Milestone Payments, Development and Regulatory, Capitalized, Cumulative | Trajenta | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | $ 446.4 | ||||||||
Milestone Payments, Development and Regulatory, Capitalized, Cumulative | Jardiance | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | $ 299.5 | ||||||||
Milestone Payments, Development and Regulatory, Capitalized, Cumulative | Basaglar | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | $ (250.0) | ||||||||
Sales | Erbitux | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Collaborative arrangement, rights and obligations (percentage) | 38.00% | ||||||||
Royalty Agreement Terms | Olumiant | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Collaborative arrangement, rights and obligations (percentage) | 20.00% | ||||||||
Research and Development Exp | Olumiant | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Collaborative arrangement, rights and obligations (percentage) | 30.00% | ||||||||
Milestone Payments, Development and Regulatory, Expensed | Olumiant | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Research and development | $ 20.0 | $ 30.0 | $ 55.0 | ||||||
Milestone Payments, Development and Regulatory | Olumiant | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | 130.0 | ||||||||
Milestone Payments, Development and Regulatory | Tanezumab | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | 350.0 | ||||||||
Milestone Payments, Sales-based | Olumiant | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | 150.0 | ||||||||
Milestone Payments, Sales-based | Tanezumab | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | $ 1,230.0 | ||||||||
Profit and Development and Marketing Share | Effient | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Collaborative arrangement, rights and obligations (percentage) | 50.00% | ||||||||
Human pharmaceutical products | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 5,289.2 | 4,917.4 | $ 15,791.1 | 14,415.8 | |||||
Human pharmaceutical products | Trajenta | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 135.7 | 153.3 | 418.5 | 408.2 | |||||
Human pharmaceutical products | Jardiance | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 166.9 | 127.2 | 465.1 | 304.3 | |||||
Human pharmaceutical products | Basaglar | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 201.2 | 145.7 | 569.0 | 278.3 | |||||
Human pharmaceutical products | Erbitux | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 159.5 | 163.5 | 475.5 | 477.0 | |||||
Human pharmaceutical products | Product | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 133.7 | 137.6 | 397.0 | 403.3 | |||||
Human pharmaceutical products | Collaboration and Other Revenue | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 25.8 | 25.9 | 78.5 | 73.7 | |||||
Human pharmaceutical products | Effient | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 45.3 | 55.9 | 104.8 | 326.6 | |||||
Europe | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 1,017.0 | 1,017.0 | 3,142.9 | 2,877.6 | |||||
Europe | Milestone Payments, Development and Regulatory, Capitalized (Deferred) | Olumiant | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | 65.0 | ||||||||
Japan | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 608.8 | 616.7 | 1,828.9 | 1,767.0 | |||||
Japan | Milestone Payments, Development and Regulatory, Capitalized (Deferred) | Olumiant | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | $ 15.0 | ||||||||
U.S. | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 3,446.6 | 3,104.4 | 10,211.0 | 9,361.8 | |||||
U.S. | Milestone Payments, Development and Regulatory, Capitalized (Deferred) | Olumiant | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Milestones (deferred) capitalized | 100.0 | ||||||||
U.S. | Human pharmaceutical products | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 3,062.7 | 2,751.3 | 9,073.2 | 8,188.4 | |||||
U.S. | Human pharmaceutical products | Trajenta | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 50.3 | 68.4 | 161.3 | 174.2 | |||||
U.S. | Human pharmaceutical products | Jardiance | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 104.2 | 83.8 | 284.8 | 198.3 | |||||
U.S. | Human pharmaceutical products | Basaglar | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 157.3 | 115.2 | 440.4 | 196.7 | |||||
U.S. | Human pharmaceutical products | Erbitux | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | 132.6 | 136.0 | 394.0 | 398.2 | |||||
U.S. | Human pharmaceutical products | Effient | |||||||||
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items] | |||||||||
Revenue | $ 30.2 | $ 42.7 | $ 59.4 | $ 290.8 |
Asset Impairment, Restructuring, and Other Special Charges (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Restructuring Cost and Reserve [Line Items] | ||||
Severance | $ (5.4) | $ 171.5 | $ (25.3) | $ 339.2 |
Total asset impairment and other special charges | 88.7 | 235.0 | 261.3 | 331.2 |
Asset impairment and other special charges | 83.3 | 406.5 | 236.0 | 670.4 |
Human pharmaceutical products | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance | 0.0 | 165.7 | (24.7) | 277.1 |
Total asset impairment and other special charges | 3.5 | 25.0 | 2.0 | 25.0 |
Animal health products | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Severance | (5.4) | 5.8 | (0.6) | 62.1 |
Total asset impairment and other special charges | $ 85.2 | $ 210.0 | $ 259.3 | $ 306.2 |
Financial Instruments (Narrative) (Details) € in Millions, ¥ in Millions, £ in Millions, SFr in Millions, $ in Millions |
3 Months Ended | 9 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2017
USD ($)
|
Sep. 30, 2018
EUR (€)
|
Sep. 30, 2018
CHF (SFr)
|
Sep. 30, 2018
GBP (£)
|
Sep. 30, 2018
JPY (¥)
|
Dec. 31, 2017
USD ($)
|
|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Maximum remaining maturity of foreign currency derivatives | 30 days | ||||||||
Description of derivative activity volume (percentage) | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | 20.00% | |||
Interest rate cash flow hedge gain (loss) to be reclassified during next 12 months | $ 15.0 | $ 15.0 | |||||||
Cash payment | 155.4 | ||||||||
OTTI recognized | 0.0 | $ 0.0 | $ 0.0 | $ 0.0 | |||||
Available-for-sale, percentage of nonperforming assets (percentage) | 60.00% | ||||||||
Amount of receivable derecognized | 645.1 | $ 645.1 | $ 723.2 | ||||||
Buy Us Dollar Sell Euro | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Derivative liability, notional amount | 1,400.0 | 1,400.0 | |||||||
Derivative asset, notional amount | € | € 1,190 | ||||||||
Buy Euro Sell Us Dollar | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Derivative liability, notional amount | € | € 1,570 | ||||||||
Derivative asset, notional amount | 1,840.0 | 1,840.0 | |||||||
Buy US dollar Sell Japanese Yen | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Derivative liability, notional amount | 426.9 | 426.9 | |||||||
Derivative asset, notional amount | ¥ | ¥ 47,940 | ||||||||
Buy GBP Sell USD | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Derivative liability, notional amount | SFr | SFr 234.1 | ||||||||
Derivative asset, notional amount | 243.2 | 243.2 | |||||||
Buy US dollar Sell British pound | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Derivative liability, notional amount | 512.2 | 512.2 | |||||||
Derivative asset, notional amount | £ | £ 389.4 | ||||||||
Buy British Pound and Sell US Dollars | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Derivative liability, notional amount | 466.4 | 466.4 | |||||||
Derivative asset, notional amount | 613.0 | 613.0 | |||||||
Interest Rate Swap | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Derivative liability, notional amount | 1,530.0 | 1,530.0 | |||||||
Derivative asset, notional amount | 350.0 | 350.0 | |||||||
Foreign Currency Denominated Debt | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Long-term debt, including current portion | 3,450.0 | 3,450.0 | $ 3,700.0 | ||||||
Equity Securities | |||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||
Unrealized gain (loss), net | $ (40.8) | $ (3.4) |
Financial Instruments (Elanco Debt Issuance) (Details) - USD ($) |
1 Months Ended | ||
---|---|---|---|
Sep. 05, 2018 |
Sep. 30, 2018 |
Aug. 14, 2018 |
|
Senior Notes | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 2,000,000,000 | ||
Senior Notes | Senior Notes Due August 27, 2021 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 500,000,000 | ||
Stated interest rate (percentage) | 3.912% | ||
Senior Notes | Senior Notes Due August 28, 2023 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 750,000,000 | ||
Stated interest rate (percentage) | 4.272% | ||
Senior Notes | Senior Notes Due August 28, 2028 | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 750,000,000 | ||
Stated interest rate (percentage) | 4.90% | ||
Secured Debt | Term Facility | |||
Debt Instrument [Line Items] | |||
Debt instrument, face amount | $ 500,000,000 | ||
Debt instrument, term | 3 years | ||
Proceeds from issuance of notes | $ 2,480,000,000 | ||
Revolving Credit Facility | Line of Credit | |||
Debt Instrument [Line Items] | |||
Debt instrument, term | 5 years | ||
Line of credit facility, maximum borrowing capacity | $ 750,000,000 | ||
Line of credit, outstanding balance | $ 0 |
Financial Instruments (Effect of Risk-Management Instruments) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Designated as Hedging Instrument | Effect from hedged fixed-rate debt | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Effect from hedged fixed-rate debt | $ (19.6) | $ (4.0) | $ (94.1) | $ 3.6 |
Designated as Hedging Instrument | Effect from interest rate contracts | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Effect from interest rate contracts | 19.6 | 4.0 | 94.1 | (3.6) |
Effective portion of losses on interest rate contracts reclassified from accumulated other comprehensive loss | 3.7 | 3.7 | 11.1 | 11.1 |
Not Designated as Hedging Instrument | Foreign currency exchange contracts | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Net losses on foreign currency exchange contracts not designated as hedging instruments | 0.7 | 16.3 | 76.5 | 79.2 |
Net investment hedges | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Effective portion of risk-management instruments that was recognized in other comprehensive income (loss) | (47.8) | (58.7) | 53.0 | (332.0) |
Net investment hedges | Cross-currency interest rate swaps | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Effective portion of risk-management instruments that was recognized in other comprehensive income (loss) | 14.7 | (38.2) | 52.3 | (95.8) |
Cash Flow Hedging | Interest Rate Swap | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Effective portion of risk-management instruments that was recognized in other comprehensive income (loss) | $ 0.0 | $ 0.0 | $ 0.0 | $ 13.0 |
Financial Instruments (Fair Value of Financial Instruments) (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity Securities without readily determinable fair value, amount | $ 394.7 | |
Noncurrent investments | 2,005.8 | $ 5,678.8 |
Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,646.3 | 4,763.9 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,646.3 | 4,763.9 |
Short-term investments, debt securities | 76.1 | 1,497.9 |
Noncurrent investments | 2,005.8 | 5,678.8 |
Short-term commercial paper borrowings | (399.7) | (2,696.8) |
Long-term debt, including current portion | (12,277.1) | (10,950.3) |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,646.3 | 4,763.9 |
Short-term commercial paper borrowings | (398.4) | (2,690.6) |
Long-term debt, including current portion | (12,542.2) | (11,529.9) |
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 6,646.3 | 4,712.4 |
Short-term commercial paper borrowings | 0.0 | 0.0 |
Long-term debt, including current portion | 0.0 | 0.0 |
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0.0 | 51.5 |
Short-term commercial paper borrowings | (398.4) | (2,690.6) |
Long-term debt, including current portion | (12,542.2) | (11,529.9) |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash equivalents | 0.0 | 0.0 |
Short-term commercial paper borrowings | 0.0 | 0.0 |
Long-term debt, including current portion | 0.0 | 0.0 |
U.S. government and agency securities | Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 10.6 | 218.2 |
Noncurrent investments, debt securities | 159.6 | 365.0 |
U.S. government and agency securities | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 10.5 | 217.8 |
Noncurrent investments, debt securities | 152.0 | 360.0 |
U.S. government and agency securities | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 10.5 | 217.8 |
Noncurrent investments, debt securities | 152.0 | 360.0 |
U.S. government and agency securities | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 10.5 | 217.8 |
Noncurrent investments, debt securities | 152.0 | 360.0 |
U.S. government and agency securities | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 0.0 | 0.0 |
Noncurrent investments, debt securities | 0.0 | 0.0 |
U.S. government and agency securities | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 0.0 | 0.0 |
Noncurrent investments, debt securities | 0.0 | 0.0 |
Corporate debt securities | Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 52.7 | 1,183.2 |
Noncurrent investments, debt securities | 631.5 | 3,473.5 |
Corporate debt securities | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 52.7 | 1,182.3 |
Noncurrent investments, debt securities | 622.0 | 3,464.3 |
Corporate debt securities | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 52.7 | 1,182.3 |
Noncurrent investments, debt securities | 622.0 | 3,464.3 |
Corporate debt securities | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 0.0 | 0.0 |
Noncurrent investments, debt securities | 0.0 | 0.0 |
Corporate debt securities | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 52.7 | 1,182.3 |
Noncurrent investments, debt securities | 622.0 | 3,464.3 |
Corporate debt securities | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 0.0 | 0.0 |
Noncurrent investments, debt securities | 0.0 | 0.0 |
Mortgage-backed securities | Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncurrent investments, debt securities | 114.1 | 204.2 |
Mortgage-backed securities | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncurrent investments, debt securities | 109.5 | 202.4 |
Mortgage-backed securities | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncurrent investments, debt securities | 109.5 | 202.4 |
Mortgage-backed securities | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncurrent investments, debt securities | 0.0 | 0.0 |
Mortgage-backed securities | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncurrent investments, debt securities | 109.5 | 202.4 |
Mortgage-backed securities | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Noncurrent investments, debt securities | 0.0 | 0.0 |
Asset-backed securities | Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 11.6 | 94.3 |
Noncurrent investments, debt securities | 27.3 | 656.0 |
Asset-backed securities | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 11.5 | 94.2 |
Noncurrent investments, debt securities | 27.0 | 653.9 |
Asset-backed securities | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 11.5 | 94.2 |
Noncurrent investments, debt securities | 27.0 | 653.9 |
Asset-backed securities | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 0.0 | 0.0 |
Noncurrent investments, debt securities | 0.0 | 0.0 |
Asset-backed securities | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 11.5 | 94.2 |
Noncurrent investments, debt securities | 27.0 | 653.9 |
Asset-backed securities | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 0.0 | 0.0 |
Noncurrent investments, debt securities | 0.0 | 0.0 |
Other securities | Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 39.3 | |
Cost and equity method investments | 66.4 | |
Other securities | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 137.4 | |
Cost and equity method investments | 132.1 | |
Other securities | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 137.4 | |
Cost and equity method investments | 132.1 | |
Other securities | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0.0 | |
Cost and equity method investments | 0.0 | |
Other securities | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0.0 | |
Cost and equity method investments | 0.0 | |
Other securities | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 137.4 | |
Cost and equity method investments | 132.1 | |
Marketable equity securities | Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 146.4 | |
Marketable equity securities | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 287.9 | |
Marketable equity securities | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 287.9 | |
Marketable equity securities | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 287.9 | |
Marketable equity securities | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0.0 | |
Marketable equity securities | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Equity securities | 0.0 | |
Marketable equity securities | Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity securities | 131.0 | |
Marketable equity securities | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity securities | 281.3 | |
Marketable equity securities | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity securities | 281.3 | |
Marketable equity securities | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity securities | 281.3 | |
Marketable equity securities | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity securities | 0.0 | |
Marketable equity securities | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Marketable equity securities | 0.0 | |
Other securities | Cost | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 1.4 | 3.6 |
Other securities | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 1.4 | 3.6 |
Other securities | Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 1.4 | 3.6 |
Other securities | Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 0.0 | 0.0 |
Other securities | Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 1.4 | 3.6 |
Other securities | Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Short-term investments, debt securities | 0.0 | 0.0 |
Cost and equity method investments | Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cost and equity method investments | $ 275.3 | $ 584.8 |
Financial Instruments (Risk Management Instruments) (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Effect from interest rate contracts | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | $ (0.2) | |
Effect from interest rate contracts | Designated as Hedging Instrument | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | 0.0 | |
Effect from interest rate contracts | Designated as Hedging Instrument | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | (0.2) | |
Effect from interest rate contracts | Designated as Hedging Instrument | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | 0.0 | |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | $ (62.0) | (208.0) |
Other noncurrent liabilities | (41.4) | (45.2) |
Carrying Amount | Effect from interest rate contracts | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.8 | |
Sundry | 35.1 | |
Other current liabilities | (2.7) | |
Other noncurrent liabilities | (66.5) | (10.5) |
Carrying Amount | Cross-currency interest rate swaps | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 30.3 | |
Sundry | 6.9 | |
Other current liabilities | (16.6) | (33.4) |
Other noncurrent liabilities | (26.0) | |
Carrying Amount | Foreign currency exchange contracts | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 6.3 | 26.8 |
Other current liabilities | (14.0) | (36.0) |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | (62.0) | (208.0) |
Other noncurrent liabilities | (41.4) | (45.2) |
Estimate of Fair Value Measurement | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | 0.0 | 0.0 |
Other noncurrent liabilities | 0.0 | 0.0 |
Estimate of Fair Value Measurement | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | 0.0 | 0.0 |
Other noncurrent liabilities | 0.0 | 0.0 |
Estimate of Fair Value Measurement | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other current liabilities | (62.0) | (208.0) |
Other noncurrent liabilities | (41.4) | (45.2) |
Estimate of Fair Value Measurement | Effect from interest rate contracts | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.8 | |
Sundry | 35.1 | |
Other current liabilities | (2.7) | (0.2) |
Other noncurrent liabilities | (66.5) | (10.5) |
Estimate of Fair Value Measurement | Effect from interest rate contracts | Designated as Hedging Instrument | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.0 | |
Sundry | 0.0 | |
Other current liabilities | 0.0 | |
Other noncurrent liabilities | 0.0 | 0.0 |
Estimate of Fair Value Measurement | Effect from interest rate contracts | Designated as Hedging Instrument | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.8 | |
Sundry | 35.1 | |
Other current liabilities | (2.7) | |
Other noncurrent liabilities | (66.5) | (10.5) |
Estimate of Fair Value Measurement | Effect from interest rate contracts | Designated as Hedging Instrument | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.0 | |
Sundry | 0.0 | |
Other current liabilities | 0.0 | |
Other noncurrent liabilities | 0.0 | 0.0 |
Estimate of Fair Value Measurement | Cross-currency interest rate swaps | Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 30.3 | |
Sundry | 6.9 | |
Other current liabilities | (16.6) | (33.4) |
Other noncurrent liabilities | (26.0) | |
Estimate of Fair Value Measurement | Cross-currency interest rate swaps | Designated as Hedging Instrument | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.0 | |
Sundry | 0.0 | |
Other current liabilities | 0.0 | 0.0 |
Other noncurrent liabilities | 0.0 | |
Estimate of Fair Value Measurement | Cross-currency interest rate swaps | Designated as Hedging Instrument | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 30.3 | |
Sundry | 6.9 | |
Other current liabilities | (16.6) | (33.4) |
Other noncurrent liabilities | (26.0) | |
Estimate of Fair Value Measurement | Cross-currency interest rate swaps | Designated as Hedging Instrument | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.0 | |
Sundry | 0.0 | |
Other current liabilities | 0.0 | 0.0 |
Other noncurrent liabilities | 0.0 | |
Estimate of Fair Value Measurement | Foreign currency exchange contracts | Not Designated as Hedging Instrument | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 6.3 | 26.8 |
Other current liabilities | (14.0) | (36.0) |
Estimate of Fair Value Measurement | Foreign currency exchange contracts | Not Designated as Hedging Instrument | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.0 | 0.0 |
Other current liabilities | 0.0 | 0.0 |
Estimate of Fair Value Measurement | Foreign currency exchange contracts | Not Designated as Hedging Instrument | Significant Other Observable Inputs (Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 6.3 | 26.8 |
Other current liabilities | (14.0) | (36.0) |
Estimate of Fair Value Measurement | Foreign currency exchange contracts | Not Designated as Hedging Instrument | Significant Unobservable Inputs (Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Other receivables | 0.0 | 0.0 |
Other current liabilities | $ 0.0 | $ 0.0 |
Financial Instruments (Contractual Maturities) (Details) $ in Millions |
Sep. 30, 2018
USD ($)
|
---|---|
Debt Securities Contractual Maturities | |
Total | $ 985.1 |
Less Than 1 Year | 74.7 |
1-5 Years | 620.5 |
6-10 Years | 135.4 |
More Than 10 Years | $ 154.5 |
Financial Instruments (Unrealized gain and losses) (Details) - USD ($) $ in Millions |
Sep. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Fair Value Disclosures [Abstract] | ||
Unrealized gross gains | $ 2.1 | $ 184.7 |
Unrealized gross losses | 24.4 | 47.5 |
Fair value of securities in an unrealized gain position | 164.0 | 1,434.2 |
Fair value of securities in an unrealized loss position | $ 816.7 | $ 4,692.8 |
Financial Instruments (Realized gain and losses) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Fair Value Disclosures [Abstract] | ||||
Proceeds from sales | $ 951.5 | $ 3,003.0 | ||
Realized gross gains on sales | 9.0 | 82.9 | ||
Realized gross losses on sales | $ 0.8 | $ 3.2 | ||
Adoption of ASU [Abstract] | ||||
Proceeds from sales | $ 52.0 | $ 5,598.4 | ||
Realized gross gains on sales | 0.4 | 8.1 | ||
Realized gross losses on sales | $ 0.7 | $ 49.7 |
Income Taxes (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Operating Loss Carryforwards [Line Items] | ||||
Effective income tax rate, percentage | 18.50% | 6.10% | 26.20% | 24.10% |
Acquired in-process research and development | $ 30.0 | $ 205.0 | $ 1,654.5 | $ 1,062.6 |
ARMO and AurKa | ||||
Operating Loss Carryforwards [Line Items] | ||||
Acquired in-process research and development | $ 1,560.0 | |||
Tax Year 2013 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax year under examination | 2013 | |||
Tax Year 2014 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax year under examination | 2014 | |||
Tax Year 2015 | ||||
Operating Loss Carryforwards [Line Items] | ||||
Tax year under examination | 2015 |
Retirement Benefits (Narrative) (Details) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Sep. 30, 2018
USD ($)
|
Sep. 30, 2018
USD ($)
|
|
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | ||
Curtailment gain | $ 28.0 | $ 28.0 |
Pension contributions | 35.0 | |
Payment for additional discretionary funding | 200.0 | |
Estimated future employer contributions in current fiscal year | $ 15.0 | $ 15.0 |
Retirement Benefits (Components of Net Periodic Benefit Cost) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Defined Benefit Plan Disclosure [Line Items] | ||||
Curtailment (gain) loss | $ (28.0) | $ (28.0) | ||
Defined Benefit Pension Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 74.2 | $ 86.0 | 232.3 | $ 251.6 |
Interest cost | 117.9 | 103.6 | 342.5 | 309.2 |
Expected return on plan assets | (212.7) | (196.4) | (636.3) | (585.7) |
Amortization of prior service cost | 1.1 | 1.4 | 3.6 | 4.3 |
Recognized actuarial loss | 79.2 | 72.5 | 261.2 | 215.6 |
Curtailment (gain) loss | 1.3 | 0.0 | 1.3 | 0.0 |
Net periodic benefit cost | 61.0 | 67.1 | 204.6 | 195.0 |
Retiree Health Benefit Plans | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Service cost | 10.1 | 11.6 | 31.7 | 34.8 |
Interest cost | 14.9 | 13.2 | 42.3 | 39.6 |
Expected return on plan assets | (44.8) | (40.2) | (132.7) | (120.6) |
Amortization of prior service cost | (19.3) | (22.5) | (60.2) | (67.5) |
Recognized actuarial loss | 0.8 | 4.6 | 5.4 | 13.8 |
Curtailment (gain) loss | (29.3) | 0.0 | (29.3) | 0.0 |
Net periodic benefit cost | $ (67.6) | $ (33.3) | $ (142.8) | $ (99.9) |
Contingencies (Details) R$ in Millions, $ in Millions |
1 Months Ended | 9 Months Ended | ||||||
---|---|---|---|---|---|---|---|---|
Aug. 29, 2018
lawsuit
|
Aug. 31, 2018
USD ($)
patent
|
Jul. 31, 2018
company
product
|
Jun. 30, 2018
case
|
Aug. 31, 2015
plaintiff
|
Sep. 30, 2018
USD ($)
lawsuit
claim
company
patent
individual
plaintiff
demand
defendant
application
|
Sep. 30, 2018
BRL (R$)
lawsuit
claim
company
patent
individual
plaintiff
demand
defendant
application
|
Feb. 28, 2017
company
demand
|
|
Loss Contingency [Line Items] | ||||||||
Number of companies | company | 4 | |||||||
Number of generic products | product | 1 | |||||||
U.S. | Alimta | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of new application | application | 10 | 10 | ||||||
Number of defendants | defendant | 2 | 2 | ||||||
Number of companies | company | 5 | 5 | ||||||
Dr Reddy's Lab | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of cases ruled in favor | case | 2 | |||||||
Japanese Administrative Proceedings | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of companies | company | 3 | |||||||
Number of demands | demand | 3 | 3 | ||||||
Number of patents | patent | 2 | 2 | ||||||
Number of demands resumed | demand | 1 | |||||||
Number of demands remaining | demand | 2 | |||||||
Product Liability Litigation | Cymbalta | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of lawsuits | lawsuit | 140 | 140 | ||||||
Number of plaintiffs | plaintiff | 4 | 1,470 | 1,470 | |||||
Product Liability Litigation | California | Cymbalta | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of lawsuits | individual | 40 | 40 | ||||||
Employee Litigation | Brazil | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of lawsuits | lawsuit | 30 | 30 | ||||||
Damages awarded, value | $ 125.0 | R$ 500 | ||||||
Number of Individuals | individual | 105 | 105 | ||||||
Agri Stats, Inc. | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of lawsuits | lawsuit | 25 | |||||||
Adocia S.A | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of patents | patent | 2 | |||||||
New claims filed | claim | 2 | 2 | ||||||
Amount awarded to other party | $ | $ 11.7 | |||||||
Estimated possible loss | $ | 1,800.0 | |||||||
Gain Contingency, Unrecorded Amount | $ | $ 188.0 | |||||||
Plaintiff Appealing Decision of Court | Employee Litigation | Brazil | ||||||||
Loss Contingency [Line Items] | ||||||||
Number of Individuals | individual | 305 | 305 |
Other Comprehensive Income (Loss) (AOCI) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
Dec. 31, 2017 |
|||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Beginning balance | $ 11,667.9 | ||||||
Other comprehensive income (loss) before reclassifications | $ 610.3 | $ 141.0 | 234.5 | $ 588.4 | |||
Net amount reclassified from accumulated other comprehensive loss | 49.9 | 26.7 | 140.8 | 62.8 | |||
Net other comprehensive income (loss) | [1] | 660.2 | 167.7 | 375.3 | 651.2 | ||
Ending balance | 14,150.9 | 14,150.9 | |||||
Accumulated Other Comprehensive Loss | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Beginning balance | (6,108.7) | (4,742.3) | (5,694.9) | (5,225.8) | |||
Reclassification due to adoption of new accounting standard | $ (128.9) | ||||||
Ending balance | (5,448.5) | (4,574.6) | (5,448.5) | (4,574.6) | |||
Foreign Currency Translation Gains (Losses) | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Beginning balance | (1,671.5) | (1,349.4) | (1,233.4) | (1,867.3) | |||
Reclassification due to adoption of new accounting standard | 0.0 | ||||||
Other comprehensive income (loss) before reclassifications | 60.6 | 135.8 | (377.5) | 653.7 | |||
Net amount reclassified from accumulated other comprehensive loss | 0.0 | 8.1 | 0.0 | 8.1 | |||
Net other comprehensive income (loss) | 60.6 | 143.9 | (377.5) | 661.8 | |||
Ending balance | (1,610.9) | (1,205.5) | (1,610.9) | (1,205.5) | |||
Unrealized Net Gains (Losses) on Securities | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Beginning balance | (18.1) | 153.2 | 113.5 | 224.0 | |||
Reclassification due to adoption of new accounting standard | (128.9) | ||||||
Other comprehensive income (loss) before reclassifications | 1.1 | 33.9 | 31.0 | 9.6 | |||
Net amount reclassified from accumulated other comprehensive loss | (0.2) | (23.9) | (32.8) | (70.4) | |||
Net other comprehensive income (loss) | 0.9 | 10.0 | (1.8) | (60.8) | |||
Ending balance | (17.2) | 163.2 | (17.2) | 163.2 | |||
Defined Benefit Pension and Retiree Health Benefit Plans | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Beginning balance | (4,190.6) | (3,348.5) | (4,340.7) | (3,371.6) | |||
Reclassification due to adoption of new accounting standard | 0.0 | ||||||
Other comprehensive income (loss) before reclassifications | 548.6 | (28.7) | 581.0 | (83.3) | |||
Net amount reclassified from accumulated other comprehensive loss | 47.2 | 40.1 | 164.9 | 117.8 | |||
Net other comprehensive income (loss) | 595.8 | 11.4 | 745.9 | 34.5 | |||
Ending balance | (3,594.8) | (3,337.1) | (3,594.8) | (3,337.1) | |||
Effective Portion of Cash Flow Hedges | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Beginning balance | (228.5) | (197.6) | (234.3) | (210.9) | |||
Reclassification due to adoption of new accounting standard | 0.0 | ||||||
Other comprehensive income (loss) before reclassifications | 0.0 | 0.0 | 0.0 | 8.4 | |||
Net amount reclassified from accumulated other comprehensive loss | 2.9 | 2.4 | 8.7 | 7.3 | |||
Net other comprehensive income (loss) | 2.9 | 2.4 | 8.7 | 15.7 | |||
Ending balance | (225.6) | (195.2) | (225.6) | (195.2) | |||
AOCI Attributable to Parent | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Beginning balance | (6,108.7) | (4,774.9) | (5,718.6) | (5,274.0) | |||
Reclassification due to adoption of new accounting standard | (105.2) | (105.2) | (104.8) | ||||
Ending balance | (5,439.5) | (4,609.4) | (5,439.5) | (4,609.4) | |||
AOCI Attributable to Noncontrolling Interest | |||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||||||
Beginning balance | 23.7 | 48.2 | |||||
Reclassification due to adoption of new accounting standard | $ (24.1) | ||||||
Ending balance | $ (9.0) | $ 34.8 | $ (9.0) | $ 34.8 | |||
|
Other Comprehensive Income (Loss) (Tax effect) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Benefit/(provision) for income taxes allocated to other comprehensive income (loss) items | $ (146.4) | $ 19.0 | $ (202.7) | $ 142.7 |
Foreign currency translation gains/losses | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Benefit/(provision) for income taxes allocated to other comprehensive income (loss) items | 7.0 | 33.9 | (11.2) | 149.7 |
Unrealized net gains/losses on securities | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Benefit/(provision) for income taxes allocated to other comprehensive income (loss) items | (0.2) | (4.2) | 1.1 | 25.4 |
Defined benefit pension and retiree health benefit plans | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Benefit/(provision) for income taxes allocated to other comprehensive income (loss) items | (152.4) | (9.4) | (190.3) | (24.0) |
Effective portion of cash flow hedges | ||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||
Benefit/(provision) for income taxes allocated to other comprehensive income (loss) items | $ (0.8) | $ (1.3) | $ (2.3) | $ (8.4) |
Other Comprehensive Income (Loss) (Reclassification) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications for the period (net of tax) | $ 49.9 | $ 26.7 | $ 140.8 | $ 62.8 |
Other, net | 15.4 | (49.9) | (90.1) | (188.6) |
Tax (benefit) expense | 261.5 | 36.0 | 749.8 | 460.5 |
Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications for the period (net of tax) | 49.9 | 26.7 | 140.8 | 62.8 |
Prior service benefits, net | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of retirement benefit items: | (18.2) | (21.1) | (56.6) | (63.2) |
Amortization of retirement benefit items | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of retirement benefit items: | 80.0 | 77.1 | 266.6 | 229.4 |
Defined Benefit Pension and Retiree Health Benefit Plans | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Amortization of retirement benefit items: | 61.8 | 56.0 | 210.0 | 166.2 |
Tax benefit | (14.6) | (15.9) | (45.1) | (48.4) |
Total reclassifications for the period (net of tax) | 47.2 | 40.1 | 164.9 | 117.8 |
Unrealized net gains/losses on securities | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Total reclassifications for the period (net of tax) | (0.2) | (23.9) | (32.8) | (70.4) |
Unrealized net gains/losses on securities | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other, net | (0.3) | (36.7) | (41.6) | (108.2) |
Tax (benefit) expense | 0.1 | 12.8 | 8.8 | 37.8 |
Net of tax | (0.2) | (23.9) | (32.8) | (70.4) |
Other, net of tax | Reclassification out of Accumulated Other Comprehensive Income | ||||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | ||||
Other, net | $ 2.9 | $ 10.5 | $ 8.7 | $ 15.4 |
Other - Net, (Income) Expense (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Nonoperating Income (Expense) [Abstract] | ||||
Interest expense | $ 69.4 | $ 61.9 | $ 193.9 | $ 162.1 |
Interest income | (32.1) | (45.1) | (118.8) | (114.6) |
Retirement benefit | (62.9) | (63.8) | (174.2) | (191.3) |
Other income | 41.0 | (2.9) | 9.0 | (44.8) |
Other–net, (income) expense | $ 15.4 | $ (49.9) | $ (90.1) | $ (188.6) |
Segment Information (Revenue by Product) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Revenues | $ 6,061.9 | $ 5,658.0 | $ 18,117.1 | $ 16,710.6 |
Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 5,289.2 | 4,917.4 | 15,791.1 | 14,415.8 |
Animal health products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 772.7 | 740.6 | 2,326.0 | 2,294.8 |
Endocrinology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,837.9 | 2,560.7 | 8,491.6 | 7,175.0 |
Trulicity | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 816.2 | 527.7 | 2,274.3 | 1,380.8 |
Humalog | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 664.6 | 696.2 | 2,226.1 | 2,083.0 |
Forteo | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 390.8 | 441.7 | 1,138.5 | 1,235.8 |
Humulin® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 322.1 | 300.5 | 994.0 | 972.8 |
Basaglar | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 201.2 | 145.7 | 569.0 | 278.3 |
Jardiance | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 166.9 | 127.2 | 465.1 | 304.3 |
Trajenta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 135.7 | 153.3 | 418.5 | 408.2 |
Other Endocrinology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 140.4 | 168.4 | 406.1 | 511.8 |
Oncology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,064.2 | 957.6 | 3,130.9 | 2,800.5 |
Alimta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 520.5 | 514.5 | 1,576.0 | 1,537.3 |
Cyramza | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 198.4 | 196.0 | 600.8 | 553.5 |
Erbitux | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 159.5 | 163.5 | 475.5 | 477.0 |
Other Oncology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 185.8 | 83.6 | 478.6 | 232.7 |
Cardiovascular | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 583.8 | 662.9 | 1,845.7 | 2,172.5 |
Cialis | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 467.1 | 564.9 | 1,501.2 | 1,725.7 |
Effient | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 45.3 | 55.9 | 104.8 | 326.6 |
Other Cardiovascular | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 71.4 | 42.1 | 239.7 | 120.2 |
Neuroscience | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 427.2 | 507.7 | 1,370.9 | 1,673.7 |
Cymbalta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 172.0 | 183.2 | 523.5 | 564.4 |
Zyprexa | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 109.9 | 140.6 | 360.4 | 428.9 |
Strattera® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 98.7 | 137.1 | 343.5 | 519.9 |
Other Neuroscience | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 46.6 | 46.8 | 143.5 | 160.5 |
Immunology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 319.5 | 167.6 | 762.9 | 409.6 |
Taltz® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 263.9 | 151.3 | 630.4 | 386.7 |
Other Immunology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 55.6 | 16.3 | 132.5 | 22.9 |
Other pharmaceuticals | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 56.6 | 60.9 | 189.1 | 184.5 |
U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,446.6 | 3,104.4 | 10,211.0 | 9,361.8 |
U.S. | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 3,062.7 | 2,751.3 | 9,073.2 | 8,188.4 |
U.S. | Animal health products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 383.9 | 353.0 | 1,137.8 | 1,173.4 |
U.S. | Endocrinology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,796.5 | 1,624.4 | 5,413.6 | 4,493.4 |
U.S. | Trulicity | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 645.9 | 412.9 | 1,786.5 | 1,090.1 |
U.S. | Humalog | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 365.6 | 414.9 | 1,334.2 | 1,254.3 |
U.S. | Forteo | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 182.5 | 234.1 | 529.7 | 661.5 |
U.S. | Humulin® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 216.9 | 203.0 | 677.3 | 634.9 |
U.S. | Basaglar | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 157.3 | 115.2 | 440.4 | 196.7 |
U.S. | Jardiance | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 104.2 | 83.8 | 284.8 | 198.3 |
U.S. | Trajenta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 50.3 | 68.4 | 161.3 | 174.2 |
U.S. | Other Endocrinology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 73.8 | 92.1 | 199.4 | 283.4 |
U.S. | Oncology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 619.8 | 509.3 | 1,741.2 | 1,492.8 |
U.S. | Alimta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 288.5 | 260.3 | 815.1 | 761.9 |
U.S. | Cyramza | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 67.0 | 69.5 | 210.7 | 204.3 |
U.S. | Erbitux | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 132.6 | 136.0 | 394.0 | 398.2 |
U.S. | Other Oncology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 131.7 | 43.5 | 321.4 | 128.4 |
U.S. | Cardiovascular | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 365.8 | 367.2 | 1,158.0 | 1,308.6 |
U.S. | Cialis | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 295.9 | 319.6 | 954.9 | 997.3 |
U.S. | Effient | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 30.2 | 42.7 | 59.4 | 290.8 |
U.S. | Other Cardiovascular | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 39.7 | 4.9 | 143.7 | 20.5 |
U.S. | Neuroscience | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 55.8 | 108.4 | 213.5 | 515.4 |
U.S. | Cymbalta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 14.5 | 19.6 | 39.3 | 100.8 |
U.S. | Zyprexa | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 7.0 | 12.6 | 27.6 | 49.3 |
U.S. | Strattera® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 10.5 | 52.9 | 74.4 | 276.9 |
U.S. | Other Neuroscience | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 23.8 | 23.3 | 72.2 | 88.4 |
U.S. | Immunology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 211.4 | 131.3 | 497.8 | 343.6 |
U.S. | Taltz® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 210.6 | 131.3 | 495.3 | 343.6 |
U.S. | Other Immunology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 0.8 | 0.0 | 2.5 | 0.0 |
U.S. | Other pharmaceuticals | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 13.4 | 10.7 | 49.1 | 34.6 |
Outside U.S. | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,615.3 | 2,553.6 | 7,906.1 | 7,348.7 |
Outside U.S. | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 2,226.5 | 2,166.1 | 6,717.8 | 6,227.3 |
Outside U.S. | Animal health products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 388.8 | 387.6 | 1,188.2 | 1,121.4 |
Outside U.S. | Endocrinology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,041.4 | 936.3 | 3,078.0 | 2,681.6 |
Outside U.S. | Trulicity | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 170.3 | 114.8 | 487.8 | 290.7 |
Outside U.S. | Humalog | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 299.0 | 281.3 | 891.8 | 828.6 |
Outside U.S. | Forteo | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 208.3 | 207.6 | 608.8 | 574.3 |
Outside U.S. | Humulin® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 105.1 | 97.5 | 316.7 | 337.9 |
Outside U.S. | Basaglar | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 43.9 | 30.5 | 128.5 | 81.6 |
Outside U.S. | Jardiance | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 62.7 | 43.4 | 180.3 | 105.9 |
Outside U.S. | Trajenta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 85.3 | 84.9 | 257.2 | 234.1 |
Outside U.S. | Other Endocrinology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 66.8 | 76.3 | 206.9 | 228.5 |
Outside U.S. | Oncology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 444.4 | 448.3 | 1,389.7 | 1,307.7 |
Outside U.S. | Alimta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 232.0 | 254.2 | 760.9 | 775.4 |
Outside U.S. | Cyramza | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 131.4 | 126.5 | 390.1 | 349.2 |
Outside U.S. | Erbitux | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 26.9 | 27.4 | 81.6 | 78.8 |
Outside U.S. | Other Oncology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 54.1 | 40.2 | 157.1 | 104.3 |
Outside U.S. | Cardiovascular | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 218.0 | 295.7 | 687.8 | 863.9 |
Outside U.S. | Cialis | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 171.2 | 245.3 | 546.2 | 728.5 |
Outside U.S. | Effient | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 15.1 | 13.1 | 45.3 | 35.8 |
Outside U.S. | Other Cardiovascular | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 31.7 | 37.3 | 96.3 | 99.6 |
Outside U.S. | Neuroscience | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 371.5 | 399.3 | 1,157.4 | 1,158.4 |
Outside U.S. | Cymbalta | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 157.5 | 163.5 | 484.2 | 463.6 |
Outside U.S. | Zyprexa | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 102.8 | 128.0 | 332.8 | 379.6 |
Outside U.S. | Strattera® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 88.2 | 84.1 | 269.2 | 243.0 |
Outside U.S. | Other Neuroscience | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 23.0 | 23.7 | 71.2 | 72.2 |
Outside U.S. | Immunology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 108.1 | 36.3 | 265.1 | 66.0 |
Outside U.S. | Taltz® | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 53.3 | 20.0 | 135.1 | 43.1 |
Outside U.S. | Other Immunology | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 54.8 | 16.3 | 130.0 | 22.9 |
Outside U.S. | Other pharmaceuticals | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 43.2 | 50.2 | 139.8 | 149.7 |
Europe | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,017.0 | 1,017.0 | 3,142.9 | 2,877.6 |
Japan | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 608.8 | 616.7 | 1,828.9 | 1,767.0 |
Other foreign countries | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | $ 989.5 | $ 920.0 | $ 2,934.3 | $ 2,704.2 |
Segment Information (Segment profit) (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2018 |
Sep. 30, 2017 |
Sep. 30, 2018 |
Sep. 30, 2017 |
|
Segment Reporting Information [Line Items] | ||||
Consolidated income before taxes | $ 1,411.0 | $ 591.6 | $ 2,856.8 | $ 1,913.3 |
Acquired in-process research and development (Note 3) | (30.0) | (205.0) | (1,654.5) | (1,062.6) |
Asset impairment, restructuring, and other special charges (Note 5) | (83.3) | (406.5) | (236.0) | (670.4) |
Other, net | (15.4) | 49.9 | 90.1 | 188.6 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated income before taxes | 1,676.7 | 1,364.4 | 5,213.0 | 4,188.3 |
Operating Segments | Human pharmaceutical products | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated income before taxes | 1,514.0 | 1,242.5 | 4,751.0 | 3,765.7 |
Operating Segments | Animal health products | ||||
Segment Reporting Information [Line Items] | ||||
Consolidated income before taxes | 162.6 | 121.9 | 461.9 | 422.6 |
Corporate, Non-Segment | ||||
Segment Reporting Information [Line Items] | ||||
Acquired in-process research and development (Note 3) | (30.0) | (205.0) | (1,654.5) | (1,062.6) |
Amortization of intangible assets | (153.4) | (155.8) | (458.7) | (510.0) |
Asset impairment, restructuring, and other special charges (Note 5) | (83.3) | (406.5) | (236.0) | (670.4) |
Other, net | $ 1.0 | $ (5.5) | $ (7.0) | $ (32.0) |
Segment Information (Narrative) (Details) |
9 Months Ended |
---|---|
Sep. 30, 2018
segment
| |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
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