10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2016

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-37702

Amgen Inc.

(Exact name of registrant as specified in its charter)

Delaware	95-3540776
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Amgen Center Drive, Thousand Oaks, California	91320-1799
(Address of principal executive offices)	(Zip Code)

(805) 447-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes þ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ Accelerated filer ¨ Non-accelerated filer ¨ (Do not check if a smaller reporting company) Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act)Yes ¨ No þ

As of July 25, 2016, the registrant had 748,360,906 shares of common stock, $0.0001 par value, outstanding.

AMGEN INC.

INDEX

		Page No.
PART I - FINANCIAL INFORMATION		1
Item 1.	FINANCIAL STATEMENTS	1
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME	1
	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME	2
	CONDENSED CONSOLIDATED BALANCE SHEETS	3
	CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS	4
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS	5
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	26
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	36
Item 4.	CONTROLS AND PROCEDURES	36
PART II - OTHER INFORMATION		37
Item 1.	LEGAL PROCEEDINGS	37
Item 1A.	RISK FACTORS	37
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	38
Item 6.	EXHIBITS	38
SIGNATURES		39
INDEX TO EXHIBITS		40

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PART I — FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In millions, except per share data)

(Unaudited)

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Revenues:
Product sales	$	5,474	$	5,225	$	10,713	$	10,099
Other revenues	214		145		502		304
Total revenues	5,688		5,370		11,215		10,403
Operating expenses:
Cost of sales	1,050		1,089		2,068		2,122
Research and development	900		964		1,772		1,858
Selling, general and administrative	1,292		1,160		2,495		2,186
Other	66		81		98		139
Total operating expenses	3,308		3,294		6,433		6,305
Operating income	2,380		2,076		4,782		4,098
Interest expense, net	313		277		607		529
Interest and other income, net	137		198		287		304
Income before income taxes	2,204		1,997		4,462		3,873
Provision for income taxes	334		344		692		597
Net income	$	1,870	$	1,653	$	3,770	$	3,276
Earnings per share:
Basic	$	2.49	$	2.18	$	5.01	$	4.30
Diluted	$	2.47	$	2.15	$	4.97	$	4.26
Shares used in calculation of earnings per share:
Basic	751		760		753		761
Diluted	756		768		759		769
Dividends paid per share	$	1.00	$	0.79	$	2.00	$	1.58

See accompanying notes.

1

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(In millions)

(Unaudited)

	Three months ended						Six months ended
	June 30,						June 30,
	2016			2015			2016			2015
Net income	$	1,870		$	1,653		$	3,770		$	3,276
Other comprehensive income (loss), net of reclassification adjustments and taxes:
Foreign currency translation (losses) gains	(17		)	18			16			(155		)
Effective portion of cash flow hedges	(6		)	(115		)	(185		)	63
Net unrealized gains (losses) on available-for-sale securities	184			(108		)	542			32
Other	1			—			1			—
Other comprehensive income (loss), net of taxes	162			(205		)	374			(60		)
Comprehensive income	$	2,032		$	1,448		$	4,144		$	3,216

See accompanying notes.

2

AMGEN INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In millions, except per share data)

(Unaudited)

	June 30, 2016			December 31, 2015
ASSETS
Current assets:
Cash and cash equivalents	$	2,630		$	4,144
Marketable securities	32,404			27,238
Trade receivables, net	3,078			2,995
Inventories	2,671			2,435
Other current assets	2,164			1,703
Total current assets	42,947			38,515
Property, plant and equipment, net	4,884			4,907
Intangible assets, net	11,068			11,641
Goodwill	14,799			14,787
Other assets	1,773			1,599
Total assets	$	75,471		$	71,449
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	870		$	965
Accrued liabilities	4,666			5,452
Current portion of long-term debt	5,294			2,247
Total current liabilities	10,830			8,664
Long-term debt	27,928			29,182
Long-term deferred tax liability	2,598			2,239
Other noncurrent liabilities	3,982			3,281
Contingencies and commitments
Stockholders’ equity:
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding—748.9 shares in 2016 and 754.0 shares in 2015	30,595			30,649
Accumulated deficit	(356		)	(2,086		)
Accumulated other comprehensive loss	(106		)	(480		)
Total stockholders’ equity	30,133			28,083
Total liabilities and stockholders’ equity	$	75,471		$	71,449

See accompanying notes.

3

AMGEN INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

(Unaudited)

	Six months ended
	June 30,
	2016			2015
Cash flows from operating activities:
Net income	$	3,770		$	3,276
Depreciation and amortization	1,043			1,043
Share-based compensation expense	139			160
Deferred income taxes	245			(126		)
Other items, net	42			5
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables, net	(119		)	(199		)
Inventories	(156		)	196
Other assets	(330		)	85
Accounts payable	(100		)	(198		)
Accrued income taxes	(328		)	369
Other liabilities	386			155
Net cash provided by operating activities	4,592			4,766
Cash flows from investing activities:
Purchases of property, plant and equipment	(344		)	(251		)
Purchases of intangible assets	(99		)	(50		)
Proceeds from the sale of property, plant and equipment	14			226
Purchases of marketable securities	(14,969		)	(13,530		)
Proceeds from sales of marketable securities	9,063			8,021
Proceeds from maturities of marketable securities	1,339			2,500
Other	(51		)	(227		)
Net cash used in investing activities	(5,047		)	(3,311		)
Cash flows from financing activities:
Net proceeds from issuance of debt	2,908			3,464
Repayment of debt	(1,000		)	(2,150		)
Repurchases of common stock	(1,218		)	(940		)
Dividends paid	(1,504		)	(1,201		)
Settlement of contingent consideration obligation	—			(225		)
Withholding taxes arising from shares withheld for share-based payments	(262		)	(390		)
Other	17			51
Net cash used in financing activities	(1,059		)	(1,391		)
(Decrease) increase in cash and cash equivalents	(1,514		)	64
Cash and cash equivalents at beginning of period	4,144			3,731
Cash and cash equivalents at end of period	$	2,630		$	3,795

See accompanying notes.

4

AMGEN INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

(Unaudited)

1. Summary of significant accounting policies

Business

Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics.

Basis of presentation

The financial information for the three and six months endedJune 30, 2016 and 2015, is unaudited but includes all adjustments (consisting of only normal recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year.

The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2015, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2016.

Principles of consolidation

The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in anyvariable interest entities. All material intercompany transactions and balances have been eliminated in consolidation.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

Property, plant and equipment, net

Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $7.5 billion and $7.3 billion as of June 30, 2016, and December 31, 2015, respectively.

Recent accounting pronouncements and reclassifications

During the first quarter of 2016, we adopted a new accounting standard that amends the presentation for debt issuance costs. See Note 9, Financing arrangements.

During the first quarter of 2016, we adopted a new accounting standard that amends certain aspects of the accounting for employee share-based payments. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. See Note 4, Income taxes. Previously, such amounts were recognized as increases and decreases in common stock and additional paid-in capital. This aspect of the standard was adopted prospectively, and accordingly, the Provision for income taxes for the three and six months endedJune 30, 2016, includes $37 million and $114 million, respectively, of excess tax benefits arising from share-based payments. The new standard also amends the presentation of employee share-based payment-related items in the statement of cash flows by requiring (i) that excess income tax benefits and deficiencies be classified in cash flows from operating activities (such amounts were previously included in cash flows from financing activities) and (ii) that cash paid to taxing authorities arising from the withholding of shares from employees be classified in cash flows from financing activities (such amounts were previously included in cash flows from operating activities). We adopted the aspects of the standard affecting the cash flow presentation retrospectively, and accordingly, to conform to the current year presentation, in the Condensed Consolidated Statement of Cash Flows for the six months endedJune 30, 2015, we reclassified: (a) $233 million of excess tax benefits from Net cash used in financing activities to Net cash provided by operating activities and (b) $390 million of cash paid to taxing authorities arising from withholding of shares from employees from Net cash provided by operating activities to Net cash used in financing activities.

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In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB has subsequently issued additional clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. We are currently evaluating the impact that the revenue standards will have on our consolidated financial statements and determining the transition method that we will apply.

In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value, with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets are presented at the net amount expected to be collected. This new standard also requires that credit losses related to available-for-sale debt securities be recorded through an allowance for such losses rather than reducing the carrying amount under the current other-than-temporary-impairment model. The new standard is effective for interim and annual periods beginning on January 1, 2020. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

Certain amounts in the Condensed Consolidated Statement of Cash Flows for the six months endedJune 30, 2015, have been reclassified from Accounts payable to Other liabilities within Changes in operating assets and liabilities, net of acquisitions to conform to the current year presentation.

2. Restructuring

We continue to execute on the transformation and process improvement efforts announced in 2014. As part of these efforts, we committed to a more agile and efficient operating model. Our transformation and process improvement efforts across the Company are enabling us to reallocate resources to fund many of our innovative pipeline and growth opportunities that will deliver value to patients and stockholders. These efforts include a restructuring, which is also delivering cost savings and funding investments. As part of the restructuring, we are closing or have closed our facilities in Washington state and Colorado and reducing the number of buildings we occupy at our headquarters in Thousand Oaks, California, as well as at other locations.

We continue to estimate that we will incur $800 million to $900 million of pre-tax charges in connection with our restructuring, including (i) separation and other headcount-related costs of $535 million to $585 million with respect to staff reductions and (ii) asset-related charges of $265 million to $315 million consisting primarily of asset impairments, accelerated depreciation and other related costs resulting from the consolidation of our worldwide facilities. Through June 30, 2016, we have incurred $471 million of separation and other headcount-related costs and $213 million of asset-related charges. We expect that we will incur most of the remaining estimated costs during the remainder of 2016 and in 2017 in order to support our ongoing transformation and process improvement efforts.

The amounts related to the restructuring recorded in the Condensed Consolidated Statements of Income during the three and six months endedJune 30, 2016, were not significant. As of June 30, 2016, the total restructuring liability decreased to $35 million due primarily to payments related to separation costs.

3. Business combinations

Dezima Pharma B.V.

On October 14, 2015, we acquired all of the outstanding stock of Dezima Pharma B.V. (Dezima), a privately-held, Netherlands-based biotechnology company focused on developing innovative treatments for dyslipidemia. Dezima’s lead molecule is AMG 899 (formerly TA-8995), an oral, once-daily cholesteryl ester transfer protein inhibitor that has completed certain phase 2 trials. This transaction was accounted for as a business combination. Upon its acquisition, Dezima became a

6

wholly owned subsidiary of Amgen, and its operations have been included in our consolidated financial statements commencing on the acquisition date.

The aggregate acquisition date consideration to acquire Dezima consisted of (in millions):

Total cash paid to former shareholders of Dezima	$	300
Fair value of contingent consideration obligations	110
Total consideration	$	410

In connection with this acquisition, we are obligated to make additional payments to the former shareholders of Dezima of up to $1.25 billion contingent upon the achievement of certain development and sales-related milestones. In addition, low-single-digit royalties will be paid on net product sales above a certain threshold. The estimated fair values of the contingent consideration obligations aggregated to $110 million as of the acquisition date.See Note 11, Fair value measurement.

The fair values of assets acquired and liabilities assumed included primarily in-process research and development (IPR&D) of $400 million, goodwill of $108 million and deferred tax liabilities of $100 million. This valuation reflects delayed development pending competitor clinical trials in this class.

Pro forma results of operations for this acquisition have not been presented because the acquisition is not material to our consolidated results of operations.

4. Income taxes

The effective tax rates for the three and six months endedJune 30, 2016, were 15.2% and 15.5%, respectively, compared with 17.2% and 15.4% for the corresponding periods of the prior year. The effective rates differ from the federal statutory rates primarily as a result of indefinitely invested earnings of our foreign operations. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be invested indefinitely outside the United States.

The decrease in our effective tax rate for the three months endedJune 30, 2016, was due primarily to the favorable tax impact of discrete benefits associated with tax incentives and the adoption of a new accounting standard that amends certain aspects of the accounting for employee share-based compensation payments. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. The decrease was offset partially by the unfavorable tax impact of the changes in the jurisdictional mix of income and expenses.

The increase in our effective tax rate for the six months endedJune 30, 2016, was due primarily to the unfavorable tax impact of changes in the jurisdictional mix of income and expenses and by a state tax audit settlement in the three months ended March 31, 2015. The increase was offset partially by discrete benefits associated with tax incentives and the adoption of a new accounting standard that amends certain aspects of the accounting for employee share-based compensation payments.

Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico. The rate is 4.0% effective through December 31, 2017. We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred.

One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely audited by the tax authorities in those jurisdictions. Significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws and regulations.

We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009, or to California state income tax examinations for years ended on or before December 31, 2008. We are currently under audit in several jurisdictions, including a U.S. federal income tax examination for tax years ended December 31, 2010, 2011, and 2012. Tax audits can involve complex issues, interpretations and judgments, and their resolution can take many years, particularly if subject to negotiation or litigation. Our assessments of uncertain tax benefits are based on information available to us at this time, including estimates and assumptions that have been deemed appropriate by management but may not be representative of final audit resolutions.

During the three and six months endedJune 30, 2016, the gross amount of our unrecognized tax benefits (UTBs) increased by approximately $110 million and $220 million, respectively, as a result of tax positions taken during the current year. Substantially all of the UTBs as of June 30, 2016, if recognized, would affect our effective tax rate.

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5. Earnings per share

The computation of basic earnings per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include principally shares that may be issued under our stock option, restricted stock and performance unit awards, as determined using the treasury stock method (collectively, dilutive securities).

The computations for basic and diluted EPS were as follows (in millions, except per share data):

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Income (Numerator):
Net income for basic and diluted EPS	$	1,870	$	1,653	$	3,770	$	3,276
Shares (Denominator):
Weighted-average shares for basic EPS	751		760		753		761
Effect of dilutive securities	5		8		6		8
Weighted-average shares for diluted EPS	756		768		759		769
Basic EPS	$	2.49	$	2.18	$	5.01	$	4.30
Diluted EPS	$	2.47	$	2.15	$	4.97	$	4.26

For the three and six months endedJune 30, 2016 and 2015, the number of anti-dilutive employee share-based awards excluded from the computation of diluted EPS was not significant.

6. Available-for-sale investments

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions):

Type of security as of June 30, 2016	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	7,916	$	104	$	—		$	8,020
Other government-related debt securities:
U.S.	345		2		—			347
Foreign and other	1,814		54		(2		)	1,866
Corporate debt securities:
Financial	8,120		121		(3		)	8,238
Industrial	8,345		141		(13		)	8,473
Other	1,002		17		(1		)	1,018
Residential mortgage-backed securities	1,729		15		(6		)	1,738
Other mortgage- and asset-backed securities	2,197		10		(27		)	2,180
Money market mutual funds	1,673		—		—			1,673
Other short-term interest-bearing securities	1,014		—		—			1,014
Total interest-bearing securities	34,155		464		(52		)	34,567
Equity securities	89		34		—			123
Total available-for-sale investments	$	34,244	$	498	$	(52	)	$	34,690

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Type of security as of December 31, 2015	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	4,298	$	—	$	(24	)	$	4,274
Other government-related debt securities:
U.S.	536		—		(2		)	534
Foreign and other	1,768		7		(36		)	1,739
Corporate debt securities:
Financial	7,904		7		(40		)	7,871
Industrial	7,961		11		(136		)	7,836
Other	905		1		(21		)	885
Residential mortgage-backed securities	1,484		1		(15		)	1,470
Other mortgage- and asset-backed securities	2,524		—		(55		)	2,469
Money market mutual funds	3,370		—		—			3,370
Other short-term interest-bearing securities	528		—		—			528
Total interest-bearing securities	31,278		27		(329		)	30,976
Equity securities	88		48		—			136
Total available-for-sale investments	$	31,366	$	75	$	(329	)	$	31,112

The fair values of available-for-sale investments by classification in the Condensed Consolidated Balance Sheets were as follows (in millions):

Classification in the Condensed Consolidated Balance Sheets	June 30, 2016		December 31, 2015
Cash and cash equivalents	$	2,163	$	3,738
Marketable securities	32,404		27,238
Other assets — noncurrent	123		136
Total available-for-sale investments	$	34,690	$	31,112

Cash and cash equivalents in the above table excludes cash of $467 million and $406 million as of June 30, 2016, and December 31, 2015, respectively.

The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions):

Contractual maturity	June 30, 2016		December 31, 2015
Maturing in one year or less	$	3,965	$	4,578
Maturing after one year through three years	11,141		9,370
Maturing after three years through five years	12,155		9,932
Maturing after five years through ten years	3,335		3,087
Maturing after ten years	53		70
Mortgage- and asset-backed securities	3,918		3,939
Total interest-bearing securities	$	34,567	$	30,976

For the three months endedJune 30, 2016 and 2015, realized gains totaled $31 million and $18 million, respectively, and realized losses totaled $54 million and $27 million, respectively. For the six months ended June 30, 2016 and 2015, realized gains totaled $68 million and $54 million, respectively, and realized losses totaled $121 million and $98 million, respectively. The cost of securities sold is based on the specific identification method.

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The unrealized losses on available-for-sale investments and their related fair values were as follows (in millions):

	Less than 12 months					12 months or greater
Type of security as of June 30, 2016	Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities	$	174	$	—		$	—	$	—
Other government-related debt securities:
Foreign and other	53		(1		)	67		(1		)
Corporate debt securities:
Financial	420		(2		)	171		(1		)
Industrial	884		(8		)	405		(5		)
Other	64		—			31		(1		)
Residential mortgage-backed securities	100		(1		)	289		(5		)
Other mortgage- and asset-backed securities	168		(4		)	481		(23		)
Equity securities	1		—			—		—
Total	$	1,864	$	(16	)	$	1,444	$	(36	)

	Less than 12 months					12 months or greater
Type of security as of December 31, 2015	Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities	$	4,196	$	(24	)	$	—	$	—
Other government-related debt securities:
U.S.	494		(2		)	20		—
Foreign and other	1,306		(32		)	56		(4		)
Corporate debt securities:
Financial	5,988		(38		)	228		(2		)
Industrial	5,427		(108		)	679		(28		)
Other	807		(19		)	39		(2		)
Residential mortgage-backed securities	804		(8		)	304		(7		)
Other mortgage- and asset-backed securities	1,834		(19		)	561		(36		)
Total	$	20,856	$	(250	)	$	1,887	$	(79	)

The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.

We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether we will more likely than not be required to sell, the security before recovery of its amortized cost basis. Our assessment of whether a security is other-than-temporarily impaired could change in the future based on new developments or changes in assumptions related to any particular security. As of June 30, 2016, and December 31, 2015, we believe the cost bases for our available-for-sale investments were recoverable in all material respects.

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7. Inventories

Inventories consisted of the following (in millions):

	June 30, 2016		December 31, 2015
Raw materials	$	205	$	201
Work in process	1,510		1,529
Finished goods	956		705
Total inventories	$	2,671	$	2,435

8. Goodwill and other intangible assets

Goodwill

Changes in the carrying amounts of goodwill were as follows (in millions):

	Six months ended June 30,
	2016		2015
Beginning balance	$	14,787	$	14,788
Goodwill related to acquisitions of businesses(1)	2		—
Currency translation adjustments	10		(65		)
Ending balance	$	14,799	$	14,723

⁽¹⁾  Consists of goodwill recognized on the acquisition dates of business combinations and subsequent adjustments to these amounts resulting from changes to the acquisition date fair values of net assets acquired in the business combinations recorded during their respective measurement periods.

Identifiable intangible assets

Identifiable intangible assets consisted of the following (in millions):

	June 30, 2016							December 31, 2015
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Finite-lived intangible assets:
Developed product technology rights	$	12,313	$	(5,472	)	$	6,841	$	12,310	$	(4,996	)	$	7,314
Licensing rights	3,275		(1,149		)	2,126		3,275		(998		)	2,277
Research and development technology rights	1,138		(675		)	463		1,134		(635		)	499
Marketing-related rights	1,349		(726		)	623		1,186		(650		)	536
Total finite-lived intangible assets	18,075		(8,022		)	10,053		17,905		(7,279		)	10,626
Indefinite-lived intangible assets:
IPR&D	1,015		—			1,015		1,015		—			1,015
Total identifiable intangible assets	$	19,090	$	(8,022	)	$	11,068	$	18,920	$	(7,279	)	$	11,641

Developed product technology rights consist of rights related to marketed products acquired in business combinations. Licensing rights consist primarily of contractual rights acquired in business combinations to receive future milestones, royalties and profit sharing payments, capitalized payments to third parties for milestones related to regulatory approvals to commercialize products and up-front payments associated with royalty obligations for marketed products. Research and development (R&D) technology rights consist of technology used in R&D with alternative future uses. Marketing-related intangible assets consist primarily of rights related to the sale and distribution of marketed products.

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IPR&D consists of R&D projects acquired in a business combination that are not complete at the time of acquisition due to remaining technological risks and/or lack of receipt of required regulatory approvals. As of June 30, 2016, the projects include primarily AMG 899, acquired in the acquisition of Dezima (see Note 3, Business combinations); oprozomib, acquired in the acquisition of Onyx Pharmaceuticals, Inc. (Onyx); and Parsabiv^™ (etelcalcetide), acquired in the acquisition of KAI Pharmaceuticals.

All IPR&D projects have major risks and uncertainties associated with the timely and successful completion of development and commercialization of these product candidates, including our ability to confirm their safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs. We are not permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require our completing clinical trials that demonstrate a product candidate is safe and effective. In addition, the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans, as well as competitive product launches, impact the revenues a product can generate. Consequently, the eventual realized value, if any, of these acquired IPR&D projects may vary from their estimated fair values. We review IPR&D projects for impairment annually, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and upon the establishment of technological feasibility or regulatory approval.

During the three months endedJune 30, 2016 and 2015, we recognized amortization charges associated with our finite-lived intangible assets of $371 million and $345 million, respectively. During the six months endedJune 30, 2016 and 2015, we recognized amortization charges associated with our finite-lived intangible assets of $740 million and $686 million, respectively. The total estimated amortization charges for our finite-lived intangible assets for the remaining six months ending December 31, 2016, and the years ending December 31, 2017, 2018, 2019, 2020 and 2021, are $0.7 billion, $1.3 billion, $1.2 billion, $1.1 billion, $1.0 billion and $0.9 billion, respectively.

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9. Financing arrangements

The principal amounts, fixed contractual coupon rates and aggregate carrying value of our long-term borrowings were as follows (in millions):

	June 30, 2016			December 31, 2015
2.30% notes due 2016 (2.30% 2016 Notes)	$	—		$	750
2.50% notes due 2016 (2.50% 2016 Notes)	1,000			1,000
2.125% notes due 2017 (2.125% 2017 Notes)	1,250			1,250
Floating Rate Notes due 2017	600			600
1.25% notes due 2017 (1.25% 2017 Notes)	850			850
5.85% notes due 2017 (5.85% 2017 Notes)	1,100			1,100
6.15% notes due 2018 (6.15% 2018 Notes)	500			500
Term Loan due 2018 (Term Loan)	1,725			1,975
4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes)	606			599
5.70% notes due 2019 (5.70% 2019 Notes)	1,000			1,000
Floating Rate Notes due 2019	250			250
2.20% notes due 2019 (2.20% 2019 Notes)	1,400			1,400
2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes)	750			733
4.50% notes due 2020 (4.50% 2020 Notes)	300			300
2.125% notes due 2020 (2.125% 2020 Notes)	750			750
3.45% notes due 2020 (3.45% 2020 Notes)	900			900
4.10% notes due 2021 (4.10% 2021 Notes)	1,000			1,000
3.875% notes due 2021 (3.875% 2021 Notes)	1,750			1,750
1.25% euro-denominated notes due 2022 (1.25% 2022 euro Notes)	1,388			—
2.70% notes due 2022 (2.70% 2022 Notes)	500			500
3.625% notes due 2022 (3.625% 2022 Notes)	750			750
0.41% Swiss-franc-denominated bonds due 2023 (0.41% 2023 Swiss franc Bonds)	717			—
3.625% notes due 2024 (3.625% 2024 Notes)	1,400			1,400
3.125% notes due 2025 (3.125% 2025 Notes)	1,000			1,000
2.00% euro-denominated notes due 2026 (2.00% 2026 euro Notes)	833			—
5.50% pound-sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes)	633			700
4.00% pound-sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes)	932			1,032
6.375% notes due 2037 (6.375% 2037 Notes)	552			900
6.90% notes due 2038 (6.90% 2038 Notes)	291			500
6.40% notes due 2039 (6.40% 2039 Notes)	466			1,000
5.75% notes due 2040 (5.75% 2040 Notes)	412			700
4.95% notes due 2041 (4.95% 2041 Notes)	600			600
5.15% notes due 2041 (5.15% 2041 Notes)	974			2,250
5.65% notes due 2042 (5.65% 2042 Notes)	487			1,250
5.375% notes due 2043 (5.375% 2043 Notes)	261			1,000
4.40% notes due 2045 (4.40% 2045 Notes)	1,250			1,250
4.563% notes due 2048 (4.563% 2048 Notes)	1,415			—
4.663% notes due 2051 (4.663% 2051 Notes)	3,541			—
Other notes	100			100
Unamortized bond discounts and issuance costs	(1,011		)	(210		)
Total carrying value of debt	$	33,222		$	31,429
Less current portion	(5,294		)	(2,247		)
Total noncurrent debt	$	27,928		$	29,182

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The principal amounts of notes denominated in foreign currencies in the above table include €550 million of 4.375% 2018 euro Notes, €675 million of 2.125% 2019 euro Notes, €1,250 million of 1.25% 2022 euro Notes, CHF700 million of 0.41% 2023 Swiss franc Bonds, €750 million of 2.00% 2026 euro Notes, £475 million of 5.50% 2026 pound sterling Notes and £700 million of 4.00% 2029 pound sterling Notes.

There are no material differences between the effective interest rates and coupon rates of any of our borrowings, except for the 4.563% 2048 Notes and the 4.663% 2051 Notes, which have effective interest rates of approximately 6.3% and 5.6%, respectively.

During the first quarter of 2016, we retrospectively adopted a new accounting standard that amends the presentation of debt issuance costs. Such costs are now presented as a direct deduction from the carrying amount of the debt liability and not as deferred charges presented as assets on our Condensed Consolidated Balance Sheets. As a result of adopting this new accounting standard, our Condensed Consolidated Balance Sheet at December 31, 2015, was restated to reflect this impact, which reduced both Other current assets and the Current portion of long-term debt by $3 million and both Other assets and Long-term debt by $124 million.

Debt repayments

During the six months endedJune 30, 2016, we repaid $250 million of principal on our Term Loan due 2018 and the $750 million aggregate principal amount of the 2.30% 2016 Notes.

Debt issuances

During the six months endedJune 30, 2016, we issued debt securities in the following offerings:

• In March 2016, we issued $704 million principal amount of bonds, consisting of the 0.41% 2023 Swiss franc Bonds (CHF700 million principal amount).

• In February 2016, we issued $2.2 billion aggregate principal amount of notes, consisting of the 1.25% 2022 euro Notes (€1,250 million principal amount) and the 2.00% 2026 euro Notes (€750 million principal amount).

Debt issuance costs incurred in connection with both issuances of debt totaling approximately $13 million are being amortized over the respective lives of the debt securities and the related charges are included in Interest expense, net, in the Condensed Consolidated Statements of Income.

In the event of a change-in-control triggering event, as defined, we may be required to purchase all or a portion of these debt securities (as well as the debt exchange issuances discussed below) at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, all of the euro-denominated notes issued during 2016 may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and a make-whole amount, as defined. These euro-denominated notes may be redeemed without payment of a make-whole amount if they are redeemed on or after three months prior to their maturity date.

Debt exchange

During the three months ended June 30, 2016, we completed a private offering to exchange portions of certain outstanding senior notes due 2037 through 2043 (collectively, the Old Notes), listed below, for new senior notes, consisting of principal amounts of $1.4 billion of 4.563% 2048 Notes and $3.5 billion of 4.663% 2051 Notes (collectively, the New Notes).

The following principal amounts of each series of Old Notes were validly tendered and subsequently canceled (in millions):

	Principal Amount Exchanged
6.375% 2037 Notes	$	348
6.90% 2038 Notes	209
6.40% 2039 Notes	534
5.75% 2040 Notes	288
5.15% 2041 Notes	1,276
5.65% 2042 Notes	763
5.375% 2043 Notes	739

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The New Notes bear lower fixed coupon rates while requiring higher principal repayments on extended maturity dates, compared with the Old Notes that were exchanged. There were no other significant changes to the terms between the Old Notes and the New Notes. The exchange is considered a debt modification, and there were no cash payments to or cash receipts from the note holders as a result of the exchange. Existing deferred financing costs associated with the Old Notes, as well as discounts associated with the New Notes aggregating $801 million, will be accreted over the term of the New Notes and recorded as Interest expense, net. Transaction costs of $24 million incurred for the exchange were expensed immediately in Interest and other income, net.

10. Stockholders’ equity

Stock repurchase program

Activity under our stock repurchase program, on a trade date basis, was as follows (in millions):

	2016			2015
	Shares	Dollars		Shares	Dollars
First quarter	4.7	$	690	2.9	$	451
Second quarter	3.9	591		3.3	515
	8.6	$	1,281	6.2	$	966

As of June 30, 2016, $3.6 billion remained available under our stock repurchase program.

Dividends

In July 2016, the Board of Directors declared a quarterly cash dividend of $1.00 per share of common stock, which will be paid in September 2016.

In March 2016 and December 2015, the Board of Directors declared quarterly cash dividends of $1.00 per share of common stock, which were paid in June 2016 and March 2016, respectively.

Accumulated other comprehensive income/(loss)

The components of accumulated other comprehensive income/(loss) (AOCI) were as follows (in millions):

	Foreign currency translation			Cash flow hedges			Available-for-sale securities			Other			AOCI
Balance as of December 31, 2015	$	(511	)	$	297		$	(260	)	$	(6	)	$	(480	)
Foreign currency translation adjustments	36			—			—			—			36
Unrealized (losses) gains	—			(117		)	379			—			262
Reclassification adjustments to income	—			(166		)	30			—			(136		)
Income taxes	(3		)	104			(51		)	—			50
Balance as of March 31, 2016	$	(478	)	$	118		$	98		$	(6	)	$	(268	)
Foreign currency translation adjustments	(22		)	—			—			—			(22		)
Unrealized (losses) gains	—			(144		)	268			—			124
Reclassification adjustments to income	—			133			23			—			156
Other	—			—			—			1			1
Income taxes	5			5			(107		)	—			(97		)
Balance as of June 30, 2016	$	(495	)	$	112		$	282		$	(5	)	$	(106	)

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The reclassifications out of AOCI and into earnings were as follows (in millions):

	Amounts reclassified out of AOCI
Components of AOCI	Three months ended June 30, 2016			Three months ended June 30, 2015			Line item affected in the  Statements of Income
Cash flow hedges:
Foreign currency contract gains	$	79		$	91		Product sales
Cross-currency swap contract (losses) gains	(212		)	136			Interest and other income, net
Forward interest rate contract losses	—			(1		)	Interest expense, net
	(133		)	226			Total before income tax
	49			(81		)	Tax benefit (expense)
	$	(84	)	$	145		Net of taxes
Available-for-sale securities:
Net realized losses	$	(23	)	$	(9	)	Interest and other income, net
	8			3			Tax benefit
	$	(15	)	$	(6	)	Net of taxes

	Amounts reclassified out of AOCI
Components of AOCI	Six months ended June 30, 2016			Six months ended June 30, 2015			Line item affected in the  Statements of Income
Cash flow hedges:
Foreign currency contract gains	$	175		$	160		Product sales
Cross-currency swap contract losses	(142		)	(47		)	Interest and other income, net
Forward interest rate contract losses	—			(1		)	Interest expense, net
	33			112			Total before income tax
	(12		)	(40		)	Tax expense
	$	21		$	72		Net of taxes
Available-for-sale securities:
Net realized losses	$	(53	)	$	(44	)	Interest and other income, net
	8			16			Tax benefit
	$	(45	)	$	(28	)	Net of taxes

11. Fair value measurement

To estimate the fair value of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows:

Level 1	—	Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access
Level 2	—	Valuations for which all significant inputs are observable, either directly or indirectly, other than level 1 inputs
Level 3	—	Valuations based on inputs that are unobservable and significant to the overall fair value measurement

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.

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The fair value of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis was as follows (in millions):

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Fair value measurement
as of June 30, 2016, using:							Total
Assets:
Available-for-sale investments:
U.S. Treasury securities	$	8,020	$	—	$	—	$	8,020
Other government-related debt securities:
U.S.	—		347		—		347
Foreign and other	—		1,866		—		1,866
Corporate debt securities:
Financial	—		8,238		—		8,238
Industrial	—		8,473		—		8,473
Other	—		1,018		—		1,018
Residential mortgage-backed securities	—		1,738		—		1,738
Other mortgage- and asset-backed securities	—		2,180		—		2,180
Money market mutual funds	1,673		—		—		1,673
Other short-term interest-bearing securities	—		1,014		—		1,014
Equity securities	123		—		—		123
Derivatives:
Foreign currency contracts	—		68		—		68
Cross-currency swap contracts	—		17		—		17
Interest rate swap contracts	—		266		—		266
Total assets	$	9,816	$	25,225	$	—	$	35,041
Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	27	$	—	$	27
Cross-currency swap contracts	—		456		—		456
Forward interest rate contracts	—		4		—		4
Contingent consideration obligations in connection with business combinations	—		—		171		171
Total liabilities	$	—	$	487	$	171	$	658

17

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Fair value measurement
as of December 31, 2015, using:							Total
Assets:
Available-for-sale investments:
U.S. Treasury securities	$	4,274	$	—	$	—	$	4,274
Other government-related debt securities:
U.S.	—		534		—		534
Foreign and other	—		1,739		—		1,739
Corporate debt securities:
Financial	—		7,871		—		7,871
Industrial	—		7,836		—		7,836
Other	—		885		—		885
Residential mortgage-backed securities	—		1,470		—		1,470
Other mortgage- and asset-backed securities	—		2,469		—		2,469
Money market mutual funds	3,370		—		—		3,370
Other short-term interest-bearing securities	—		528		—		528
Equity securities	136		—		—		136
Derivatives:
Foreign currency contracts	—		142		—		142
Interest rate swap contracts	—		71		—		71
Total assets	$	7,780	$	23,545	$	—	$	31,325
Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	8	$	—	$	8
Cross-currency swap contracts	—		250		—		250
Interest rate swap contracts	—		3		—		3
Contingent consideration obligations in connection with business combinations	—		—		188		188
Total liabilities	$	—	$	261	$	188	$	449

The fair values of our U.S. Treasury securities, money market mutual funds and equity securities are based on quoted market prices in active markets with no valuation adjustment.

Most of our other government-related and corporate debt securities are investment grade with maturity dates offiveyears or less from the balance sheet date. Our other government-related debt securities portfolio is composed of securities with weighted-average credit ratings of A or equivalent by Moody’s Investors Service, Inc. (Moody’s) and A- by Standard & Poor’s Financial Services LLC (S&P) or Fitch, Inc. (Fitch); and our corporate debt securities portfolio has a weighted-average credit rating of BBB+ or equivalent by S&P or Moody’s and A- by Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs.

Our residential mortgage-, other mortgage- and asset-backed securities portfolio is composed entirely of senior tranches, with credit ratings of AAA by S&P, Moody’s or Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs.

We value our other short-term interest-bearing securities at amortized cost, which approximates fair value given their near-term maturity dates.

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All of our foreign currency forward and option derivatives contracts have maturities of three years or less, and all are with counterparties that have minimum credit ratings of A- or equivalent by S&P or Moody’s. We estimated the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that utilizes an income-based industry standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency rates, London Interbank Offered Rates (LIBOR), swap rates and obligor credit default swap rates. In addition, inputs for our foreign currency option contracts include implied volatility measures. These inputs, where applicable, are at commonly quoted intervals. See Note 12, Derivative instruments.

Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P or Moody’s. We estimated the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that utilizes an income-based industry standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads. See Note 12, Derivative instruments.

Our interest rate swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P or Moody’s. We estimated the fair values of these contracts by using an income-based industry standard valuation model for which all significant inputs were observable either directly or indirectly. These inputs included LIBOR, swap rates and obligor credit default swap rates.

Contingent consideration obligations

As a result of our business acquisitions, we incurred contingent consideration obligations, as discussed below. These contingent consideration obligations are recorded at their estimated fair values, and we revalue these obligations each reporting period until the related contingencies are resolved. The fair value measurements of these obligations are based on significant unobservable inputs related to product candidates acquired in business combinations and are reviewed quarterly by management in our R&D and commercial sales organizations. These inputs include, as applicable, estimated probabilities and timing of achieving specified regulatory and commercial milestones and estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related regulatory and commercial events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of these obligations, as applicable. Changes in the fair values of contingent consideration obligations are recognized in Other operating expenses in the Condensed Consolidated Statements of Income.

Changes in the carrying amounts of contingent consideration obligations were as follows (in millions):

	Three months ended June 30,					Six months ended June 30,
	2016			2015		2016			2015
Beginning balance	$	194		$	215	$	188		$	215
Net changes in valuation	(23		)	—		(17		)	—
Ending balance	$	171		$	215	$	171		$	215

As a result of our acquisition of Dezima in October 2015, we are obligated to pay its former shareholders up to $1.25 billion of additional consideration contingent upon achieving certain development and sales-related milestones and low single-digit royalties on net product sales above a certain threshold. The estimated fair values of the contingent consideration obligations had an aggregate value of $110 million at acquisition. See Note 3, Business combinations.

As a result of our acquisition of BioVex Group, Inc. (BioVex), in March 2011, we are obligated to pay its former shareholders up to $325 million of additional consideration contingent if certain sales thresholds are achieved within specified periods of time.

We estimate the fair values of the obligations to former shareholders of Dezima and BioVex by using probability-adjusted discounted cash flows, and we review underlying key assumptions on a quarterly basis. There were no significant changes in the fair values of contingent consideration obligations during the three and six months ended June 30, 2016.

During the six months ended June 30, 2016 and 2015, there were no transfers of assets or liabilities between fair value measurement levels, and there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis.

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Summary of the fair values of other financial instruments

Cash equivalents

The estimated fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments.

Borrowings

We estimated the fair value of our long-term debt (Level 2) by taking into consideration indicative prices obtained from a third-party financial institution that utilizes industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; credit spreads; benchmark yields; foreign currency exchange rates, as applicable; and other observable inputs. As of June 30, 2016, and December 31, 2015, the aggregate fair values of our long-term debt were $36.8 billion and $33.1 billion, respectively, and the carrying values were $33.2 billion and $31.4 billion, respectively.

12. Derivative instruments

The Company is exposed to foreign currency exchange rate risks and interest rate risks related to its business operations. To reduce our risks related to these exposures, we utilize or have utilized certain derivative instruments, including foreign currency forward, foreign currency option, cross-currency swap, forward interest rate and interest rate swap contracts. We do not use derivatives for speculative trading purposes.

Cash flow hedges

We are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates associated primarily with our euro-denominated international product sales. Increases and decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are offset partially by corresponding increases and decreases in the cash flows from our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations on our international product sales, we enter into foreign currency forward and option contracts to hedge a portion of our projected international product sales, primarily over a three-year time horizon, with, at any given point in time, a higher percentage of nearer-term projected product sales being hedged than in successive periods.

As of June 30, 2016, and December 31, 2015, we had open foreign currency forward contracts with notional amounts of $3.5 billion and $3.3 billion, respectively, and open foreign currency option contracts with notional amounts of $225 million. We have designated these foreign currency forward and foreign currency option contracts, which are primarily euro based, as cash flow hedges, and accordingly, we report the effective portions of the unrealized gains and losses on these contracts in AOCI on the Condensed Consolidated Balance Sheets, and we reclassify them to earnings in the same periods during which the hedged transactions affect earnings.

To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term debt denominated in foreign currencies, we entered into cross-currency swap contracts. Under the terms of these contracts, we paid euros, pounds sterling and Swiss francs and received U.S. dollars for the notional amounts at the inception of the contracts, and based on these notional amounts, we exchange interest payments at fixed rates over the lives of the contracts by paying U.S. dollars and receiving euros, pounds sterling and Swiss francs. In addition, we will pay U.S. dollars to and receive euros, pounds sterling and Swiss francs from the counterparties at the maturities of the contracts for these same notional amounts. The terms of these contracts correspond to the related hedged debt, effectively converting the interest payments and principal repayment on the debt from euros, pounds sterling and Swiss francs to U.S. dollars. We have designated these cross-currency swap contracts as cash flow hedges, and accordingly, the effective portions of the unrealized gains and losses on these contracts are reported in AOCI on the Condensed Consolidated Balance Sheets and reclassified to earnings in the same periods during which the hedged debt affects earnings.

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The notional amounts and interest rates of our cross-currency swaps are as follows (notional amounts in millions):

	Foreign currency				U.S. dollars
Hedged notes	Notional amount		Interest rate		Notional amount		Interest rate
2.125% 2019 euro Notes	€	675	2.125	%	$	864	2.6	%
1.25% 2022 euro Notes	€	1,250	1.25	%	$	1,388	3.2	%
0.41% 2023 Swiss franc Bonds	CHF	700	0.41	%	$	704	3.4	%
2.00% 2026 euro Notes	€	750	2.00	%	$	833	3.9	%
5.50% 2026 pound sterling Notes	£	475	5.50	%	$	747	6.0	%
4.00% 2029 pound sterling Notes	£	700	4.00	%	$	1,111	4.5	%

In connection with anticipated issuances of long-term fixed-rate debt, we entered into an aggregate notional amount of $500 million in forward interest rate contracts during the three months ended June 30, 2016. The forward interest rate contracts hedge the variability in cash flows due to changes in the applicable Treasury rate between the time we entered into these contracts and the time the related debt is issued. Gains and losses on such contracts, which are designated as cash flow hedges, are reported in AOCI and will be amortized into earnings over the lives of the associated debt issuances.

The effective portions of the unrealized gain/(loss) recognized in other comprehensive income for our derivative instruments designated as cash flow hedges were as follows (in millions):

	Three months ended						Six months ended
	June 30,						June 30,
Derivatives in cash flow hedging relationships	2016			2015			2016			2015
Foreign currency contracts	$	86		$	(99	)	$	(62	)	$	293
Cross-currency swap contracts	(226		)	143			(195		)	(81		)
Forward interest rate contracts	(4		)	—			(4		)	—
Total	$	(144	)	$	44		$	(261	)	$	212

The locations in the Condensed Consolidated Statements of Income and the effective portions of the gain/(loss) reclassified out of AOCI and into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions):

		Three months ended						Six months ended
		June 30,						June 30,
Derivatives in cash flow hedging relationships	Statements of Income location	2016			2015			2016			2015
Foreign currency contracts	Product sales	$	79		$	91		$	175		$	160
Cross-currency swap contracts	Interest and other income, net	(212		)	136			(142		)	(47		)
Forward interest rate contracts	Interest expense, net	—			(1		)	—			(1		)
Total		$	(133	)	$	226		$	33		$	112

No portions of our cash flow hedge contracts are excluded from the assessment of hedge effectiveness, and the gains and losses of the ineffective portions of these hedging instruments were not material for the three and six months endedJune 30, 2016 and 2015. As of June 30, 2016, the amounts expected to be reclassified out of AOCI and into earnings over the next 12 months are approximately $124 million of net gains on our foreign currency and cross-currency swap contracts and approximately $1 million of losses on forward interest rate contracts.

Fair value hedges

To achieve a desired mix of fixed and floating interest rates on our long-term debt, we entered into interest rate swap contracts that qualify and are designated as fair value hedges. The terms of these interest rate swap contracts correspond to the related hedged debt instruments and effectively convert a fixed interest rate coupon to a floating LIBOR-based coupon over the lives of the respective notes. We had interest rate swap agreements as of June 30, 2016, and December 31, 2015, with aggregate notional amounts of $6.65 billion. The contracts have rates that range from three-month LIBOR plus 0.4% to three-month LIBOR plus 2.0%.

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For derivative instruments that qualify for and are designated as fair value hedges, we recognize in current earnings the unrealized gain or loss on the derivative resulting from the change in fair value during the period as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk. For the three and six months endedJune 30, 2016, we included the unrealized losses on hedged debt of $49 million and $198 million, respectively, in the same line item, Interest expense, net, in the Condensed Consolidated Statements of Income, as the offsetting unrealized gains of $49 million and $198 million, respectively, on the related interest rate swap agreements. For the three and six months ended June 30, 2015, we included the unrealized gains on the hedged debt of $83 million and losses of $6 million, respectively, in the same line item, Interest expense, net, in the Condensed Consolidated Statements of Income, as the offsetting unrealized losses of $83 million and gains of $6 million, respectively, on the related interest rate swap agreements.

Derivatives not designated as hedges

To reduce our exposure to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. The exposures are hedged on a month-to-month basis. As of June 30, 2016, and December 31, 2015, the total notional amounts of these foreign currency forward contracts were $727 million and $911 million, respectively.

The location in the Condensed Consolidated Statements of Income and the amount of gain/(loss) recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions):

		Three months ended					Six months ended
		June 30,					June 30,
Derivatives not designated as hedging instruments	Statements of Income location	2016			2015		2016			2015
Foreign currency contracts	Interest and other income, net	$	(24	)	$	20	$	(34	)	$	(9	)

The fair values of derivatives included on the Condensed Consolidated Balance Sheets were as follows (in millions):

	Derivative assets			Derivative liabilities
June 30, 2016	Balance Sheet location	Fair value		Balance Sheet location	Fair value
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other noncurrent assets	$	68	Accrued liabilities/ Other noncurrent liabilities	$	26
Cross-currency swap contracts	Other current assets/ Other noncurrent assets	17		Accrued liabilities/ Other noncurrent liabilities	456
Forward interest rate contracts	Other current assets/ Other noncurrent assets	—		Accrued liabilities/ Other noncurrent liabilities	4
Interest rate swap contracts	Other current assets/ Other noncurrent assets	266		Accrued liabilities/ Other noncurrent liabilities	—
Total derivatives designated as hedging instruments		351			486
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	—		Accrued liabilities	1
Total derivatives not designated as hedging instruments		—			1
Total derivatives		$	351		$	487

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	Derivative assets			Derivative liabilities
December 31, 2015	Balance Sheet location	Fair value		Balance Sheet location	Fair value
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other noncurrent assets	$	142	Accrued liabilities/ Other noncurrent liabilities	$	7
Cross-currency swap contracts	Other current assets/ Other noncurrent assets	—		Accrued liabilities/ Other noncurrent liabilities	250
Interest rate swap contracts	Other current assets/ Other noncurrent assets	71		Accrued liabilities/ Other noncurrent liabilities	3
Total derivatives designated as hedging instruments		213			260
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	—		Accrued liabilities	1
Total derivatives not designated as hedging instruments		—			1
Total derivatives		$	213		$	261

Our derivative contracts that were in liability positions as of June 30, 2016, contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early-termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. In addition, our derivative contracts are not subject to any type of master netting arrangement, and amounts due to or from a counterparty under these contracts may only be offset against other amounts due to or from the same counterparty if an event of default or termination, as defined, were to occur.

The cash flow effects of our derivative contracts for the six months ended June 30, 2016 and 2015, are included within Net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows.

13. Contingencies and commitments

Contingencies

In the ordinary course of business, we are involved in various legal proceedings and other matters that are complex in nature and have outcomes that are difficult to predict. We describe our legal proceedings and other matters that are significant or that we believe could be significant in this Note, in Note 18, Contingencies and commitments to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015, and in Note 13, Contingencies and commitments to our condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2016.

We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has been accrued previously.

Our legal proceedings range from cases brought by a single plaintiff to class actions with thousands of putative class members. These legal proceedings, as well as other matters, involve various aspects of our business and a variety of claims—including but not limited to patent infringement, marketing, pricing and trade practices and securities law—some of which present novel factual allegations and/or unique legal theories.In each of the matters described in this filing or in Note 18, Contingencies and commitments to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015, or in Note 13, Contingencies and commitments to our condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2016, plaintiffs seek an award of a not-yet-quantified amount of damages or an amount that is not material. In addition, a number of the matters pending against us are at very early stages of the legal process (which in complex proceedings of the sort faced by us often extend for several years). As a result, none of the matters pending against us described in this filing, in Note 18, Contingencies and commitments to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015, or in Note 13, Contingencies and commitments to our condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2016, have progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate a range of possible

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loss, if any, or such amounts are not material.While it is not possible to accurately predict or determine the eventual outcomes of these matters, an adverse determination in one or more of these matters currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows.

Certain recent developments concerning our legal proceedings and other matters are discussed below:

PCSK9 Antibody Patent Litigations

Patent Disputes in the European Region

As previously disclosed, Amgen was served with a patent revocation action in the Patent Court of the Chancery Division of the High Court of Justice of England and Wales (the UK Patent Court) by Pfizer Inc. seeking to revoke European Patent (UK) No. 2,215,124. Trial is scheduled for October 2017.

We are also involved in and expect future involvement in additional disputes regarding our proprotein convertase subtilisin/kexin type 9 (PCSK9) patents in other jurisdictions and regions, including matters we have filed in the United Kingdom (U.K.) and Germany.

Biosimilars Patent Litigations

We have filed a number of lawsuits against manufacturers of products that purport to be biosimilars of certain of our products. In each case, our complaint alleges that the manufacturer’s actions infringe certain patents we hold and/or that the manufacturer has failed to comply with certain provisions of the Biologics Price Competition and Innovation Act (BPCIA).

Sandoz Pegfilgrastim Litigation

On May 3, 2016, Sandoz Inc., Sandoz International GmbH and Sandoz GmbH (collectively Sandoz) filed a motion to dismiss this lawsuit pending in the U.S. District Court for the District of New Jersey, which stems from Sandoz’s abbreviated Biologics License Application (BLA) seeking U.S. Food and Drug Administration (FDA) authorization to market a biosimilar version of Amgen’s Neulasta^® (pegfilgrastim) product. On July 22, 2016, the court dismissed the case for lack of subject matter jurisdiction.

On May 12, 2016, Amgen filed a separate lawsuit in the U.S. District Court for the Northern District of California (the California Northern District Court) against Sandoz and Lek Pharmaceuticals d.d. for infringement of U.S. Patent Nos. 8,940,878 and 5,824,784 in accordance with the patent provisions of the BPCIA.

Sandoz Filgrastim Litigation

On July 1, 2016, the California Northern District Court held a claim construction hearing with respect to the patent infringement claim and counterclaims.

As previously disclosed, Sandoz filed a petition for certiorari seeking review of the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit Court) ruling concluding that a biosimilar applicant must give 180-day advance notice of first marketing and that notice may only be given after the FDA has licensed the biosimilar product and Amgen filed a conditional cross-petition for certiorari seeking review of the Federal Circuit Court’s ruling that the only remedy available when a biosimilar applicant refuses to provide its BLA is to bring a patent infringement claim. On June 20, 2016, the U.S. Supreme Court invited the Solicitor General to file briefs expressing the views of the United States on both Sandoz’s petition and Amgen’s conditional cross-petition.

Apotex Pegfilgrastim/Filgrastim Litigation

On July 5, 2016, the Federal Circuit Court affirmed the U.S. District Court for the Southern District of Florida (the Florida Southern District Court) injunction, holding that the 180-day notice of commercial marketing is mandatory under the BPCIA and can only be given post-FDA licensure of the biosimilar product.

On June 24,2016, the Florida Southern District Court issued a further claim construction decision granting the motion for summary judgment of no literal infringement of U.S. Patent No. 8,952,138 (the ’138 Patent) filed by Apotex, Inc. and Apotex Corp. (collectively Apotex) and denying the motion with respect to no infringement under the doctrine of equivalents. On June 15, 2016, the Florida Southern District Court dismissed without prejudice all claims and counterclaims related to U.S. Patent Nos. 6,162,427 and 5,824,784 on the parties’ joint stipulation of dismissal. In a separate order that same day, the Florida Southern District Court also dismissed without prejudice all counterclaims related to unlawful monopolization in violation of the Sherman Antitrust Act on the parties’ joint stipulation of dismissal. On July 11, 2016, trial began on infringement of the ’138 Patent and Apotex’s counterclaims and defenses. At the conclusion of trial on July 18,2016, the Florida Southern District Court entered partial judgment in Amgen’s favor that the asserted claims of the ’138 patent are not invalid for anticipation, obviousness, indefiniteness or lack of written description and deferred decision on Apotex’s motion for judgment of no infringement under the doctrine of

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equivalents. The case was taken under submission and the parties were directed to file proposed findings of fact and conclusions of law on or before August 18, 2016.

Hospira Epoetin Alfa Litigation

On June 3, 2016, Amgen filed a notice of appeal seeking review of the U.S. District Court of Delaware’s order that Hospira, Inc. (Hospira), a subsidiary of Pfizer Inc., need not provide Amgen discovery of certain of its manufacturing processes that Hospira withheld during the BPCIA dispute resolution process. On July 8, 2016, Hospira filed a motion to dismiss the appeal and Amgen filed an opposition brief on July 18, 2016.

Onyx Litigation

As previously disclosed, the plaintiffs and the Onyx director defendants in this class action lawsuit filed a notice of settlement with the Superior Court of the State of California for the County of San Mateo for an immaterial amount. On July 26, 2016, the court preliminarily approved the settlement.

Federal Securities Litigation—In re Amgen Inc. Securities Litigation

On July 20, 2016, the parties agreed to settle this securities class action case for an immaterial amount. The settlement remains subject to court approval.

ERISA Litigation

On June 27, 2016, the parties reached an agreement in principle to settle this case for an immaterial amount. The settlement remains subject to court approval.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to assist the reader in understanding Amgen’s business. MD&A is provided as a supplement to, and should be read in conjunction with, our Annual Report on Form 10-K for the year ended December 31, 2015, and our Quarterly Report on Form 10-Q for the period ended March 31, 2016. Our results of operations discussed in MD&A are presented in conformity with GAAP. Amgen operates in one business segment: human therapeutics. Therefore, our results of operations are discussed on a consolidated basis.

Forward-looking statements

This report and other documents we file with the U.S. Securities and Exchange Commission (SEC) contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. In addition, we or others on our behalf may make forward-looking statements in press releases or written statements or in our communications and discussions with investors and analysts in the normal course of business through meetings, webcasts, phone calls and conference calls. Such words as “expect,” “anticipate,” “outlook,” “could,” “target,” “project,” “intend,” “plan,” “believe,” “seek,” “estimate,” “should,” “may,” “assume” and “continue,” as well as variations of such words and similar expressions, are intended to identify such forward-looking statements. These statements are not guarantees of future performance, and they involve certain risks, uncertainties and assumptions that are difficult to predict. We describe our respective risks, uncertainties and assumptions that could affect the outcome or results of operations in Item 1A. Risk Factors in Part II herein. We have based our forward-looking statements on our management’s beliefs and assumptions based on information available to our management at the time the statements are made. We caution you that actual outcomes and results may differ materially from what is expressed, implied or forecast by our forward-looking statements. Reference is made in particular to forward-looking statements regarding product sales, regulatory activities, clinical trial results, reimbursement, expenses, EPS, liquidity and capital resources, trends, planned dividends, stock repurchases and restructuring plans. Except as required under the federal securities laws and the rules and regulations of the SEC, we do not have any intention or obligation to update publicly any forward-looking statements after the distribution of this report, whether as a result of new information, future events, changes in assumptions or otherwise.

Overview

Amgen is committed to unlocking the potential of biology for patients suffering from serious illnesses by discovering, developing, manufacturing and delivering innovative human therapeutics. This approach begins by using tools like advanced human genetics to unravel the complexities of disease and understand the fundamentals of human biology.

Amgen focuses on areas of high unmet medical need and leverages its expertise to strive for solutions that improve health outcomes and dramatically improve people’s lives. A biotechnology pioneer since 1980, Amgen has grown to be one of the world’s leading independent biotechnology companies, has reached millions of patients around the world and is developing a pipeline of medicines with breakaway potential.

Currently, we market therapeutics for oncology/hematology, inflammation, nephrology, bone health and cardiovascular disease. Our principal products are Enbrel^® (etanercept), Neulasta^® (pegfilgrastim), Aranesp^® (darbepoetin alfa), Prolia^® (denosumab), XGEVA^® (denosumab), Sensipar^®/Mimpara^® (cinacalcet), EPOGEN^® (epoetin alfa),and NEUPOGEN^® (filgrastim). We market several other products as well, including Vectibix^® (panitumumab), Nplate^® (romiplostim) and, more recently launched, KYPROLIS^® (carfilzomib), BLINCYTO^® (blinatumomab), Repatha^® (evolocumab), IMLYGIC^® (talimogene laherparepvec) and Corlanor^® (ivabradine). Our product sales outside the United States consist principally of sales in Europe, and we continue to expand the commercialization and marketing of our products, including in Latin America, the Middle East and Asia.

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Significant developments

Following is a summary of selected significant developments affecting our business that have occurred since the filing of our Quarterly Report on Form 10-Q for the period ended March 31, 2016. For additional developments or for a more comprehensive discussion of certain developments discussed below, see our Annual Report on Form 10-K for the year ended December 31, 2015, and our Quarterly Report on Form 10-Q for the period ended March 31, 2016.

Products/Pipeline

Bone Health

Romosozumab

• In July 2016, we and UCB, our collaboration partner in the development of romosozumab, announced that we submitted a BLA to the FDA for romosozumab, an investigational monoclonal antibody for the treatment of osteoporosis in postmenopausal women at increased risk of fracture. The BLA is based on data from the phase 3 placebo-controlled FRAME (FRActure study in postemenopausal woMen with ostEoporosis) study.

Cardiovascular

Repatha^®(evolocumab)

• In July 2016, we announced that the FDA approved the Repatha^®Pushtronex^™ system (on-body infusor with prefilled cartridge), a new, monthly single-dose administration option. The Pushtronex^™ system is a hands-free device designed to provide 420 mg of Repatha^® in a single dose.

Oncology/Hematology

BLINCYTO^®(blinatumomab)

• In May 2016, we announced that the FDA accepted for priority review the supplemental BLA for BLINCYTO^® to include new data supporting the treatment of pediatric and adolescent patients with Philadelphia chromosome-negative relapsed or refractory B-cell precursor acute lymphoblastic leukemia. The FDA has set a September 1, 2016, Prescription Drug User Fee Act target action date as a goal for the completion of their review of our application.

KYPROLIS^®(carfilzomib)

• In June 2016, the European Commission (EC) approved a variation to the marketing authorization for KYPROLIS^® to include use in combination with dexamethasone alone for adult patients with multiple myeloma who have received at least one prior therapy. The EC approved the extended indication for KYPROLIS^® based on data from the phase 3 head-to-head ENDEAVOR (RandomizEd, OpeN Label, Phase 3 Study of Carfilzomib Plus DExamethAsone Vs Bortezomib Plus DexamethasOne in Patients With Relapsed Multiple Myeloma) study.

Neuroscience

Erenumab (formerly AMG 334)

• In June 2016, we announced that the global phase 2 study evaluating the efficacy and safety of erenumab in chronic migraine prevention met its primary endpoint. Erenumab is being developed jointly with Novartis AG.

Biosimilars

ABP 501

• In July 2016, the FDA’s Arthritis Advisory Committee voted unanimously to recommend approval of our biosimilar candidate ABP 501 in all available indications of the reference product, HUMIRA^® (adalimumab). FDA advisory committees review marketed and investigational human drug products, including safety and effectiveness data, and make recommendations to the FDA. These committees are advisory and FDA officials are not bound to or limited by its recommendations, although the FDA has commonly followed the recommendation of its advisory panels. The FDA has set a Biosimilar User Fee Act target action date of September 25, 2016, for ABP 501.

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ABP 980

• In July 2016, we and Allergan plc announced the results from a phase 3 study evaluating the efficacy and safety of ABP 980 compared with trastuzumab in patients with human epidermal growth factor receptor 2-positive early breast cancer. The results ruled out inferiority compared to trastuzumab but could not rule out superiority based on its primary efficacy endpoint of the difference of the percentage of patients with a pathologic complete response.

Selected financial information

The following is an overview of our results of operations (dollar and share amounts in millions, except per share data):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
Product sales:
U.S.	$	4,317	$	4,105	5	%	$	8,436	$	7,876	7	%
Rest of the world (ROW)	1,157		1,120		3	%	2,277		2,223		2	%
Total product sales	5,474		5,225		5	%	10,713		10,099		6	%
Other revenues	214		145		48	%	502		304		65	%
Total revenues	$	5,688	$	5,370	6	%	$	11,215	$	10,403	8	%
Operating expenses	$	3,308	$	3,294	—	%	$	6,433	$	6,305	2	%
Operating income	$	2,380	$	2,076	15	%	$	4,782	$	4,098	17	%
Net income	$	1,870	$	1,653	13	%	$	3,770	$	3,276	15	%
Diluted EPS	$	2.47	$	2.15	15	%	$	4.97	$	4.26	17	%
Diluted shares	756		768		(2	)%	759		769		(1	)%

The increases in global product sales for the three and six months ended June 30, 2016, were driven by ENBREL, Prolia^®, KYPROLIS^® and XGEVA^®.

The increases in other revenues for the three and six months endedJune 30, 2016, were driven primarily by upfront payments received for licensing transactions and higher Ibrance^® royalty income. We receive an 8% royalty on Ibrance^® sales as a result of the Onyx acquisition.

The increases in operating expenses for the three and six months endedJune 30, 2016, were driven primarily by increased investments in new product launches. All categories of operating expenses benefited from savings resulting from our transformation and process improvement efforts.

The increases in net income and diluted EPS for the three and six months endedJune 30, 2016, were driven by increases in revenues and operating margins.

Although changes in foreign currency exchange rates result in increases or decreases in our reported international product sales, the benefits or detriments that such movements have on our international product sales are offset partially by corresponding increases or decreases in our international operating expenses and our related foreign currency hedging activities. By hedging our net foreign currency exposure, primarily with respect to product sales denominated in euros, our hedging activities seek to offset the impacts both positive and negative that foreign currency exchange rate changes may have on our net income. The net impacts from changes in foreign currency exchange rates were not material for the three and six months endedJune 30, 2016 and 2015.

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Results of operations

Product sales

Worldwide product sales were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
ENBREL	$	1,484	$	1,348	10	%	$	2,869	$	2,464	16	%
Neulasta®	1,149		1,158		(1	)%	2,332		2,292		2	%
Aranesp®	504		479		5	%	1,036		959		8	%
Prolia®	441		340		30	%	793		612		30	%
XGEVA®	381		331		15	%	759		671		13	%
Sensipar®/Mimpara®	389		344		13	%	756		678		12	%
EPOGEN®	331		491		(33	)%	631		1,025		(38	)%
NEUPOGEN®	196		256		(23	)%	409		502		(19	)%
Other products	599		478		25	%	1,128		896		26	%
Total product sales	$	5,474	$	5,225	5	%	$	10,713	$	10,099	6	%

Future sales of our products are influenced by a number of factors, some of which may impact sales of certain of our products more significantly than others. Such factors are discussed below and in the following sections of our Annual Report on Form 10-K for the year ended December 31, 2015: (i) Overview, Item 1. Business—Marketing, Distribution and Selected Marketed Products, (ii) Item 1A. Risk Factors and (iii) Item 7. Results of Operations—Product Sales; and in our Quarterly Report on Form 10-Q for the period ended March 31, 2016, in section Item 1A. Risk Factors.

ENBREL

Total ENBREL sales by geographic region were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
ENBREL — U.S.	$	1,423	$	1,280	11	%	$	2,749	$	2,332	18	%
ENBREL — Canada	61		68		(10	)%	120		132		(9	)%
Total ENBREL	$	1,484	$	1,348	10	%	$	2,869	$	2,464	16	%

The increases in ENBREL sales for the three and six months ended June 30, 2016, were driven primarily by an increase in net selling price, offset partially by a decline in units due to competition.

Neulasta^® 

Total Neulasta^® sales by geographic region were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
Neulasta®— U.S.	$	962	$	953	1	%	$	1,958	$	1,875	4	%
Neulasta®— ROW	187		205		(9	)%	374		417		(10	)%
Total Neulasta®	$	1,149	$	1,158	(1	)%	$	2,332	$	2,292	2	%

Thedecrease in global Neulasta^® sales for the three months ended June 30, 2016, was driven primarily by a decline in unit demand, offset partially by an increase in net selling price in the United States.

Theincrease in global Neulasta^® sales for the six months ended June 30, 2016, was driven primarily by an increase in net selling price in the United States, offset partially by a decline in unit demand.

As of June 30, 2016, the Neulasta^® Onpro^™ kit represented approximately 40% of our U.S. Neulasta^® business.

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Our final material U.S. patent for pegfilgrastim (Neulasta^®) expired in October 2015. On December 17, 2014, and November 18, 2015, Apotex and Sandoz, respectively, announced that the FDA had accepted their respective applications for filing under the abbreviated pathway for their pegfilgrastim products that are proposed biosimilar versions of Neulasta^®. Therefore, we expect to face competition in the United States, which over time may have a material adverse impact on Neulasta^® sales. For discussion of ongoing litigation between us and Apotex and Sandoz, see Note 13, Contingencies and commitments, to the condensed consolidated financial statements.

Future Neulasta^® sales will also depend in part on the development of new protocols, tests and/or treatments for cancer and/or new chemotherapy treatments or alternatives to chemotherapy that may have reduced and may continue to reduce the use of chemotherapy in some patients.

Aranesp^® 

Total Aranesp^® sales by geographic region were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
Aranesp® — U.S.	$	260	$	223	17	%	$	521	$	412	26	%
Aranesp® — ROW	244		256		(5	)%	515		547		(6	)%
Total Aranesp®	$	504	$	479	5	%	$	1,036	$	959	8	%

The increases in global Aranesp^® sales for the three and six months ended June 30, 2016, were driven primarily by higher unit demand, including a shift by some U.S. dialysis customers from EPOGEN^® to Aranesp^®, offset partially by a decrease in net selling price and unfavorable changes in inventory.

Supplementary protection certificates issued by certain countries, including France, Germany, Italy, Spain, and the U.K., relating to our European patent for darbepoetin alfa (Aranesp^®) expired in June 2016. For further information regarding our patents, see our Annual Report on Form 10-K for the year ended December 31, 2015, Part 1, Item 1. Business.

Prolia^® 

Total Prolia^® sales by geographic region were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
Prolia® — U.S.	$	286	$	215	33	%	$	507	$	385	32	%
Prolia® — ROW	155		125		24	%	286		227		26	%
Total Prolia®	$	441	$	340	30	%	$	793	$	612	30	%

The increases in global Prolia^® sales for the three and six months endedJune 30, 2016, were driven primarily by higher unit demand.

XGEVA^®  

Total XGEVA^® sales by geographic region were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
XGEVA® — U.S.	$	275	$	234	18	%	$	546	$	479	14	%
XGEVA® — ROW	106		97		9	%	213		192		11	%
Total XGEVA®	$	381	$	331	15	%	$	759	$	671	13	%

The increases in global XGEVA^® sales for the three and six months endedJune 30, 2016, were driven primarily by higher unit demand and net selling price.

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Sensipar^®/Mimpara^® 

Total Sensipar^®/Mimpara^® sales by geographic region were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
Sensipar® — U.S.	$	303	$	261	16	%	$	581	$	502	16	%
Sensipar®/Mimpara® — ROW	86		83		4	%	175		176		(1	)%
Total Sensipar®/Mimpara®	$	389	$	344	13	%	$	756	$	678	12	%

The increase in global Sensipar^®/Mimpara^® sales for the three months endedJune 30, 2016, was driven primarily by an increase in net selling price and higher unit demand.

The increase in global Sensipar^®/Mimpara^® sales for the six months endedJune 30, 2016, was driven primarily by an increase in net selling price and higher unit demand, offset partially by unfavorable changes in wholesaler and, based on prescription data, end-user inventories.

EPOGEN^® 

Total EPOGEN^® sales were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
EPOGEN® — U.S.	$	331	$	491	(33	)%	$	631	$	1,025	(38	)%

The decreases in EPOGEN^® sales for the three and six months ended June 30, 2016, were driven primarily by a decline in units resulting from competition and, to a lesser extent, a shift by some U.S. dialysis customers to Aranesp^®.

Our final material U.S. patent for EPOGEN^® expired in May 2015. There is competition in the United States, which has intensified and will continue to have a material adverse impact on EPOGEN^® sales. Currently in the United States, EPOGEN^® and Aranesp^® compete with MIRCERA^®, which F. Hoffman-La Roche Ltd. began selling in October 2014 and, as of May 2015, for which it licensed commercialization rights in the United States to Galenica Group. MIRCERA^® competes with Aranesp^® in the nephrology setting only. On December 16, 2014, Hospira submitted a BLA to the FDA under the abbreviated pathway for Retacrit^™, a proposed biosimilar to EPOGEN^®. For discussion of ongoing litigation between us and Hospira, see Note 13, Contingencies and commitments, to the condensed consolidated financial statements.

NEUPOGEN^® 

NEUPOGEN^® sales by geographic region were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
NEUPOGEN® — U.S.	$	141	$	191	(26	)%	$	291	$	372	(22	)%
NEUPOGEN® — ROW	55		65		(15	)%	118		130		(9	)%
Total NEUPOGEN®	$	196	$	256	(23	)%	$	409	$	502	(19	)%

The decreases in global NEUPOGEN^® sales for the three and six months endedJune 30, 2016, were driven primarily by lower unit demand in the United States due to the impact of short-acting competition.

There is competition in the United States, which has intensified and will continue to have a material adverse impact on sales of NEUPOGEN^®. On September 3, 2015, Sandoz announced it had launched Zarxio^®, a biosimilar version of NEUPOGEN^®, in the United States. On February 17, 2015, Apotex announced that the FDA had accepted its application for filing under the abbreviated pathway for its proposed biosimilar version of NEUPOGEN^®. For discussion of ongoing, related litigation, see Note 13, Contingencies and commitments, to the condensed consolidated financial statements.

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Other products

Other product sales by geographic region were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016		2015		Change		2016		2015		Change
KYPROLIS® — U.S.	$	142	$	112	27	%	$	271	$	209	30	%
KYPROLIS® — ROW	30		7		*		55		18		*
Vectibix® — U.S.	52		52		—	%	108		99		9	%
Vectibix® — ROW	108		108		—	%	196		183		7	%
Nplate® — U.S.	84		73		15	%	170		151		13	%
Nplate® — ROW	58		52		12	%	113		100		13	%
BLINCYTO® — U.S.	21		15		40	%	42		30		40	%
BLINCYTO® — ROW	9		2		*		15		2		*
Repatha® — U.S.	20		—		N/A		34		—		N/A
Repatha® — ROW	7		—		N/A		9		—		N/A
Other — U.S.	17		5		*		27		5		*
Other — ROW	51		52		(2	)%	88		99		(11	)%
Total other products	$	599	$	478	25	%	$	1,128	$	896	26	%
Total U.S. — other products	$	336	$	257	31	%	$	652	$	494	32	%
Total ROW — other products	263		221		19	%	476		402		18	%
Total other products	$	599	$	478	25	%	$	1,128	$	896	26	%

* Change in excess of 100%

Operating expenses

Operating expenses were as follows (dollar amounts in millions):

	Three months ended								Six months ended
	June 30,								June 30,
	2016			2015			Change		2016			2015			Change
Cost of sales	$	1,050		$	1,089		(4	)%	$	2,068		$	2,122		(3	)%
% of product sales	19.2		%	20.8		%			19.3		%	21.0		%
% of total revenues	18.5		%	20.3		%			18.4		%	20.4		%
Research and development	$	900		$	964		(7	)%	$	1,772		$	1,858		(5	)%
% of product sales	16.4		%	18.4		%			16.5		%	18.4		%
% of total revenues	15.8		%	18.0		%			15.8		%	17.9		%
Selling, general and administrative	$	1,292		$	1,160		11	%	$	2,495		$	2,186		14	%
% of product sales	23.6		%	22.2		%			23.3		%	21.6		%
% of total revenues	22.7		%	21.6		%			22.2		%	21.0		%
Other	$	66		$	81		(19	)%	$	98		$	139		(29	)%

Transformation and process improvements

We continue to execute on the transformation and process improvement efforts announced in 2014. As part of these efforts, we committed to a more agile and efficient operating model. Our transformation and process improvement efforts across the Company are enabling us to reallocate resources to fund many of our innovative pipeline and growth opportunities to deliver value to patients and stockholders. These efforts include a restructuring, which is also delivering cost savings and funding investments.

We continue to estimate that the restructuring will result in pre-tax accounting charges in the range of $800 million to $900 million, of which $684 million was incurred through June 30, 2016. The charges that were recorded related to the restructuring during the three and six months endedJune 30, 2016, were not significant. We expect that we will incur most of the remaining

32

estimated costs in the remainder of 2016 and in 2017 in order to support our ongoing transformation and process improvement efforts.

In 2016, we remain on track to deliver an estimated $400 million in incremental benefits from our ongoing transformation and process improvement efforts, versus 2015, with half of this savings achieved through June 30, 2016. These savings will enable continued investment in our pipeline and launch activities.

Cost of sales

Cost of sales decreased to 18.5%and 18.4% of total revenues for the three and six months endedJune 30, 2016, respectively. The decreases were driven primarily by manufacturing efficiencies and higher net selling prices.

Excluding the impact of the Puerto Rico excise tax, cost of sales would have been 16.7% and 16.8% of total revenues for the three and six months endedJune 30, 2016, respectively, compared with 18.5% and 18.6% for the corresponding periods of the prior year. See Note 4, Income taxes, to the condensed consolidated financial statements for further discussion of the Puerto Rico excise tax.

Research and development

The decreases in R&D expenses for the three and six months ended June 30, 2016, were driven by savings resulting from transformation and process improvement efforts, a portion of which were reinvested for the long-term benefit of the Company, as well as by lower spending required to support certain later-stage clinical programs.

For the three and six months endedJune 30, 2016, costs associated with our later-stage clinical programs support decreased by $302 million and $566 million, respectively, offset by increased costs in marketed products support of $245 million and $487 million, respectively. Discovery Research and Translational Sciences spend was relatively unchanged for both periods. Prior to approval, costs related to our launch products were categorized largely as later-stage clinical programs.

Selling, general and administrative

The increases in Selling, general and administrative expenses for the three and six months ended June 30, 2016, were driven primarily by investments in new product launches. The six months ended June 30, 2016, were also impacted by a $73 million charge related to an acquisition. Both periods benefited from transformation and process improvement efforts.

Other

Other operating expenses for the three and six months endedJune 30, 2016, included legal proceeding charges of $78 million and $105 million, respectively.

Other operating expenses for the three and six months ended June 30, 2015, included a legal proceeding charge of $71 million. The six months ended June 30, 2015, also included $67 million of severance related to our restructuring plan.

Non-operating expenses/income and income taxes

Non-operating expenses/income and income taxes were as follows (dollar amounts in millions):

	Three months ended						Six months ended
	June 30,						June 30,
	2016			2015			2016			2015
Interest expense, net	$	313		$	277		$	607		$	529
Interest and other income, net	$	137		$	198		$	287		$	304
Provision for income taxes	$	334		$	344		$	692		$	597
Effective tax rate	15.2		%	17.2		%	15.5		%	15.4		%

Interest expense, net

The increases in Interest expense, net, for the three and six months ended June 30, 2016, were due primarily to a higher average amount of fixed-rate debt outstanding.

Interest and other income, net

The decreases in Interest and other income, net, for the three and six months ended June 30, 2016, were due primarily to a gain on the sale of strategic investment in the second quarter of 2015, offset partially by higher interest income that resulted from

33

higher average cash balances and a slightly higher yield on our debt securities portfolio, net of fees incurred for the debt exchange transaction during the second quarter of 2016.

Income taxes

The decrease in our effective tax rate for the three months ended June 30, 2016, was due primarily to the favorable tax impact of discrete benefits associated with tax incentives and the adoption of a new accounting standard that amends certain aspects of the accounting for employee share-based compensation payments. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. The decrease was offset partially by the unfavorable tax impact of changes in the jurisdictional mix of income and expenses.

The increase in our effective tax rate for the six months ended June 30, 2016, was due primarily to the unfavorable tax impact of changes in the jurisdictional mix of income and expenses and by a state tax audit settlement in the three months ended March 31, 2015. The increase was offset partially by discrete benefits associated with tax incentives and the adoption of a new accounting standard that amends certain aspects of the accounting for employee share based compensation payments.

Excluding the impact of the Puerto Rico excise tax, our effective tax rate for the three and six months ended June 30, 2016, would have been 18.1% and 18.4%, respectively, compared with 20.6% and 18.9% for the corresponding periods of the prior year.

See Note 4, Income taxes, to the condensed consolidated financial statements for further discussion.

Financial condition, liquidity and capital resources

Selected financial data was as follows (in millions):

	June 30, 2016		December 31, 2015
Cash, cash equivalents and marketable securities	$	35,034	$	31,382
Total assets	$	75,471	$	71,449
Current portion of long-term debt	$	5,294	$	2,247
Long-term debt	$	27,928	$	29,182
Stockholders’ equity	$	30,133	$	28,083

We intend to continue to return capital to stockholders through the payment of cash dividends and stock repurchases reflecting our confidence in the future cash flows of our business. The timing and amount of future dividends and stock repurchases will vary based on a number of factors, including future capital requirements for strategic transactions, the availability of financing on acceptable terms, debt service requirements, our credit rating, changes to applicable tax laws or corporate laws, changes to our business model and periodic determination by our Board of Directors that cash dividends and/or stock repurchases are in the best interests of stockholders and are in compliance with applicable laws and agreements of the Company. In addition, the timing and amount of stock repurchases may also be affected by the stock price and blackout periods, in which we are restricted from repurchasing stock. The manner of stock repurchases may include private block purchases, tender offers and market transactions.

In December 2015 and March 2016, the Board of Directors declared quarterly cash dividends of $1.00 per share of common stock, which were paid on March 8 and June 8, 2016, respectively. In July 2016, the Board of Directors declared a quarterly cash dividend of $1.00 per share of common stock, which will be paid on September 8, 2016.

We have also returned capital to stockholders through our stock repurchase program. During the six months ended June 30, 2016, we repurchased $1.3 billion of our stock and paid $1.2 billion in cash during the period. During the six months ended June 30, 2015, we repurchased $966 million of our stock and paid $940 million in cash during the period. As of June 30, 2016, $3.6 billion remained available under the Board of Directors-approved stock repurchase program.

We believe that existing funds, cash generated from operations and existing sources of and access to financing are adequate to satisfy our needs for working capital; capital expenditure and debt service requirements; our plans to pay dividends and repurchase stock; and other business initiatives we plan to strategically pursue, including acquisitions and licensing activities. We anticipate that our liquidity needs can be met through a variety of sources, including cash provided by operating activities, sales of marketable securities, borrowings through commercial paper and/or our syndicated credit facilities and access to other domestic and foreign debt markets and equity markets. With respect to our U.S. operations, we believe that existing funds intended for use in the United States; cash generated from our U.S. operations, including intercompany payments and receipts; and existing sources of and access to financing (collectively U.S. funds) are adequate to continue meeting our U.S. obligations (including our plans to pay dividends and repurchase stock with U.S. funds) for the foreseeable future. See our Annual Report on Form 10-K for the year ended

34

December 31, 2015, Part 1, Item 1A. Risk Factors—Global economic conditions may negatively affect us and may magnify certain risks that affect our business.

Of our total cash, cash equivalents and marketable securities balances totaling $35.0 billion as of June 30, 2016, approximately $33.2 billion was generated from operations in foreign tax jurisdictions and is intended to be invested indefinitely outside the United States. Under current tax laws, if these funds were repatriated for use in our U.S. operations, we would be required to pay additional income taxes at the tax rates then in effect.

Certain of our financing arrangements contain non-financial covenants. In addition, our revolving credit agreement and Term Loan each include a financial covenant with respect to the level of our borrowings in relation to our equity, as defined. We were in compliance with all applicable covenants under these arrangements as of June 30, 2016.

Cash flows

Our cash flow activities were as follows (in millions):

	Six months ended June 30,
	2016			2015
Net cash provided by operating activities	$	4,592		$	4,766
Net cash used in investing activities	$	(5,047	)	$	(3,311	)
Net cash used in financing activities	$	(1,059	)	$	(1,391	)

Operating

Cash provided by operating activities has been and is expected to continue to be our primary recurring source of funds. Cash provided by operating activities during the six months ended June 30, 2016, decreased compared with the same period in the prior year due primarily to the timing of payments to taxing authorities and vendors, as well as the effective termination of foreign currency forward contracts that resulted in the receipt of $247 million of cash in the prior year period, offset partially by improved operating margins.

Investing

Cash used in investing activities during the six months ended June 30, 2016, was due primarily to net activity related to marketable securities of $4.6 billion and capital expenditures of $344 million. Cash used in investing activities during the six months ended June 30, 2015, was due primarily to net activity related to marketable securities of $3.0 billion and capital expenditures of $251 million, offset partially by proceeds from the sale of property, plant and equipment of $226 million. Capital expenditures during the six months endedJune 30, 2016 and 2015, were associated primarily with manufacturing capacity expansions in various locations as well as other site developments. We currently estimate 2016 spending on capital projects and equipment to be approximately $700 million.

Financing

Cash used in financing activities during the six months ended June 30, 2016, was due primarily to the payment of dividends of $1.5 billion, repurchases of our common stock of $1.2 billion and withholding taxes arising from shares withheld for share-based payments of $262 million, offset partially by proceeds from the issuance of debt, net of repayments, of $1.9 billion. Cash used in financing activities during the six months ended June 30, 2015, was due primarily to the payment of dividends of $1.2 billion, repurchases of our common stock of $940 million, withholding taxes arising from shares withheld for share-based payments of $390 million and the settlement of an obligation incurred in connection with the acquisition of Onyx of $225 million, offset partially by proceeds from the issuance of debt, net of repayments, of $1.3 billion.

See Note 9, Financing arrangements, and Note 10, Stockholders’ equity, to the condensed consolidated financial statements for further discussion.

Critical accounting policies

The preparation of our condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the notes to the financial statements. Some of those judgments can be subjective and complex, and therefore, actual results could differ materially from those estimates under different assumptions or conditions. A summary of our critical accounting policies is presented in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2015. There were no material changes to our critical accounting policies during the six months ended June 30, 2016.

35

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information about our market risk is disclosed in Part II, Item 7A, of our Annual Report on Form 10-K for the year ended December 31, 2015, and is incorporated herein by reference. Except as discussed below, there have been no material changes during the six months endedJune 30, 2016, to the information provided in Part II, Item 7A, of our Annual Report on Form 10-K for the year ended December 31, 2015.

Interest rate sensitive financial instruments

During the first quarter of 2016, we entered into cross-currency swap contracts to hedge the entire principal amount of the debt denominated in euros and Swiss francs that we issued during this period. As of June 30, 2016, we had open cross-currency swap contracts with aggregate notional amounts of $5.6 billion that effectively convert interest payments and principal repayment of certain of our foreign currency denominated debt securities to U.S. dollars and are designated for accounting purposes as cash flow hedges. A hypothetical 100 basis point adverse movement in interest rates relative to interest rates as of June 30, 2016, would result in a reduction in the aggregate fair value of our cross-currency swap contracts of approximately $530 million, but would have no material effect on cash flows or income in the ensuing year.

Foreign currency sensitive financial instruments

As of June 30, 2016, we had outstanding euro-, pound-sterling- and Swiss-franc-denominated debt with a carrying value of $5.8 billion and a fair value of $6.4 billion. A hypothetical 20% adverse movement in foreign currency exchange rates relative to exchange rates as of June 30, 2016, would result in an increase in fair value of this debt of approximately $1.3 billion and a reduction in income of approximately $1.2 billion but would have no material effect on the related cash flows in the ensuing year. The analysis for this debt does not consider the offsetting impact that hypothetical changes in foreign currency exchange rates would have on the related cross-currency swap contracts which are in place for the majority of the foreign currency denominated debt.

With regard to our $5.6 billion notional amount of cross-currency swap contracts that are designated as cash flow hedges of certain of our debt denominated in euros, pound sterling and Swiss francs, a hypothetical 20% adverse movement in foreign currency exchange rates relative to exchange rates as of June 30, 2016, would result in a reduction in the fair values of these contracts of approximately $1.3 billion but would have no material effect on the related cash flows in the ensuing year. The impact on income during this period from the above mentioned hypothetical adverse movement in foreign currency exchange rates would be fully offset by the corresponding hypothetical changes in the carrying amounts of the related hedged debt.

Item 4. CONTROLS AND PROCEDURES

We maintain “disclosure controls and procedures,” as such term is defined under Exchange Act Rule 13a-15(e), that are designed to ensure that information required to be disclosed in Amgen’s Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Amgen’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, Amgen’s management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives and, in reaching a reasonable level of assurance, Amgen’s management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. We have carried out an evaluation under the supervision and with the participation of our management, including Amgen’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Amgen’s disclosure controls and procedures. Based upon their evaluation and subject to the foregoing, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2016.

Management determined that, as of June 30, 2016, there were no changes in our internal control over financial reporting that occurred during the fiscal quarter then ended that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

36

PART II — OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

See Note 13, Contingencies and commitments, to the condensed consolidated financial statements included in our Quarterly Reports on Form 10-Q for the periods ended June 30, 2016, and March 31, 2016, for discussions that are limited to certain recent developments concerning our legal proceedings. Those discussions should be read in conjunction with Note 18, Contingencies and commitments, to our consolidated financial statements in Part IV of our Annual Report on Form 10-K for the year ended December 31, 2015.

Item 1A. RISK FACTORS

This report and other documents we file with the SEC contain forward-looking statements that are based on current expectations, estimates, forecasts and projections about us, our future performance, our business, our beliefs and our management’s assumptions. These statements are not guarantees of future performance, and they involve certain risks, uncertainties and assumptions that are difficult to predict. You should carefully consider the risks and uncertainties facing our business. We have described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2015, the primary risks related to our business, and we periodically update those risks for material developments. Those risks are not the only ones facing us. Our business is also subject to the risks that affect many other companies, such as employment relations, general economic conditions, geopolitical events and international operations. Further, additional risks not currently known to us or that we currently believe are immaterial may in the future materially and adversely affect our business, operations, liquidity and stock price.

Below, we are providing, in supplemental form, the material changes to our risk factors that occurred during the past quarter. Our risk factors disclosed in Part 1, Item 1A, of our Annual Report, on Form 10-K for the year ended December 31, 2015, and in our Quarterly Report on Form 10-Q for the period ended March 31, 2016, provide additional disclosure for these supplemental risks and are incorporated herein by reference.

We perform a substantial amount of our commercial manufacturing activities at our Puerto Rico manufacturing facility and a substantial amount of our clinical manufacturing activities at our Thousand Oaks, California manufacturing facility; if significant disruptions or production failures occur at the Puerto Rico facility, we may not be able to supply these products or, at the Thousand Oaks facility, we may not be able to continue our clinical trials.

We currently perform all of the formulation, fill and finish for NEUPOGEN^®, Aranesp^®, EPOGEN^®, Prolia^® and XGEVA^® and substantially all of the formulation, fill and finish operations for Neulasta^® and ENBREL at our manufacturing facility in Juncos, Puerto Rico. We also currently perform all of the bulk manufacturing for Neulasta^®, NEUPOGEN^® and Aranesp^®, all of the purification of bulk EPOGEN^® material and substantially all of the bulk manufacturing for Prolia^® and XGEVA^® at this facility. We perform substantially all of the bulk manufacturing and formulation, fill and finish, and packaging for product candidates to be used in clinical trials at our manufacturing facility in Thousand Oaks, California. The global supply of our products and product candidates is significantly dependent on the uninterrupted and efficient operation of these facilities. (See our Annual Report on Form 10-K for the year ended December 31, 2015, Part 1, Item 1A. Risk Factors—Manufacturing difficulties, disruptions or delays could limit supply of our products and limit our product sales.) Since June 2015, when the Governor of Puerto Rico announced that the government (including certain government entities) is unable to pay its roughly $72 billion in debt, the government’s liquidity position has continued to deteriorate. In early April 2016, the Puerto Rico government enacted the Puerto Rico Emergency Moratorium and Financial Rehabilitation Act (Act No. 21-2016) that authorizes the Governor to declare a fiscal emergency and implement a temporary debt moratorium until January 2017. Pursuant to the new law, the Governor issued an Executive Order that declared a fiscal emergency and implemented the debt moratorium in order to prevent a shutdown of essential government services and manage the government’s cash liquidity. Public reports indicate that the Puerto Rico government is not making certain payments. On June 30, 2016, President Obama signed into law the Puerto Rico Oversight, Management, and Economic Stability Act (PROMESA) to provide a mechanism for Puerto Rico to restructure its debt, achieve fiscal responsibility, and gain access to capital markets. PROMESA establishes a federal Financial Oversight and Management Board to assist in the debt restructuring, and establishment of the Board operates as an automatic stay of creditor actions to enforce claims against the Puerto Rico government. While PROMESA is an important step in moving Puerto Rico towards economic stability, there is still a risk that Puerto Rico’s economic situation could impact the territorial government’s provision of utilities or other services in Puerto Rico that we use in the operation of our business, create the potential for increased taxes or fees to operate in Puerto Rico, result in migration of workers from Puerto Rico to the mainland United States, and make it more expensive or difficult for us to operate in Puerto Rico.

37

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended June 30, 2016, we had one outstanding stock repurchase program and the repurchase activity was as follows:

	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced program	Maximum dollar value that may yet be purchased under the program(1)
April 1 - 30	684,708	$	159.11	684,708	$	4,117,540,621
May 1 - 31	843,447	$	154.05	843,447	$	3,987,606,271
June 1 - 30	2,332,541	$	151.04	2,332,541	$	3,635,289,228
	3,860,696	$	153.13	3,860,696

(1) In October 2015, our Board of Directors authorized an increase that resulted in a total of $5.0 billion available under the stock repurchase program.

Item 6.  EXHIBITS

Reference is made to the Index to Exhibits included herein.

38

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this Quarterly Report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Amgen Inc.
		(Registrant)
Date:	July 29, 2016	By:	/S/    DAVID W. MELINE
			David W. Meline
			Executive Vice President and Chief Financial Officer

39

AMGEN INC.

INDEX TO EXHIBITS

Exhibit No.	Description
3.1	Restated Certificate of Incorporation of Amgen Inc. (As Restated March 6, 2013.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 on May 3, 2013 and incorporated herein by reference.)
3.2	Amended and Restated Bylaws of Amgen Inc. (As Amended and Restated February 15, 2016.) (Filed as an exhibit to Form 8-K on February 17, 2016 and incorporated herein by reference.)
4.1	Form of stock certificate for the common stock, par value $.0001 of the Company. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1997 on May 13, 1997 and incorporated herein by reference.)
4.2	Form of Indenture, dated January 1, 1992. (Filed as an exhibit to Form S-3 Registration Statement filed on December 19, 1991 and incorporated herein by reference.)
4.3	Agreement of Resignation, Appointment and Acceptance dated February 15, 2008. (Filed as an exhibit to Form 10-K for the year ended December 31, 2007 on February 28, 2008 and incorporated herein by reference.)
4.4	First Supplemental Indenture, dated February 26, 1997. (Filed as an exhibit to Form 8-K on March 14, 1997 and incorporated herein by reference.)
4.5	8-1/8% Debentures due April 1, 2097. (Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)
4.6	Officer’s Certificate of Amgen Inc., dated January 1, 1992, as supplemented by the First Supplemental Indenture, dated February 26, 1997, establishing a series of securities entitled “8 1/8% Debentures due April 1, 2097.” (Filed as an exhibit to Form 8-K on April 8, 1997 and incorporated herein by reference.)
4.7	Indenture, dated August 4, 2003. (Filed as an exhibit to Form S-3 Registration Statement on August 4, 2003 and incorporated herein by reference.)
4.8	Corporate Commercial Paper - Master Note between and among Amgen Inc., as Issuer, Cede & Co., as Nominee of The Depository Trust Company, and Citibank, N.A., as Paying Agent. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 1998 on May 13, 1998 and incorporated herein by reference.)
4.9	Officers’ Certificate of Amgen Inc., dated May 30, 2007, including forms of the Company’s Senior Floating Rate Notes due 2008, 5.85% Senior Notes due 2017 and 6.375% Senior Notes due 2037. (Filed as an exhibit to Form 8-K on May 30, 2007 and incorporated herein by reference.)
4.10	Officers’ Certificate of Amgen Inc., dated May 23, 2008, including forms of the Company’s 6.15% Senior Notes due 2018 and 6.90% Senior Notes due 2038. (Filed as exhibit to Form 8-K on May 23, 2008 and incorporated herein by reference.)
4.11	Officers’ Certificate of Amgen Inc., dated January 16, 2009, including forms of the Company’s 5.70% Senior Notes due 2019 and 6.40% Senior Notes due 2039. (Filed as exhibit to Form 8-K on January 16, 2009 and incorporated herein by reference.)
4.12	Officers’ Certificate of Amgen Inc., dated March 12, 2010, including forms of the Company’s 4.50% Senior Notes due 2020 and 5.75% Senior Notes due 2040. (Filed as exhibit to Form 8-K on March 12, 2010 and incorporated herein by reference.)
4.13	Officers’ Certificate of Amgen Inc., dated September 16, 2010, including forms of the Company’s 3.45% Senior Notes due 2020 and 4.95% Senior Notes due 2041. (Filed as an exhibit to Form 8-K on September 17, 2010 and incorporated herein by reference.)
4.14	Officers’ Certificate of Amgen Inc., dated June 30, 2011, including forms of the Company’s 2.30% Senior Notes due 2016, 4.10% Senior Notes due 2021 and 5.65% Senior Notes due 2042. (Filed as an exhibit to Form 8-K on June 30, 2011 and incorporated herein by reference.)
4.15	Officers’ Certificate of Amgen Inc., dated November 10, 2011, including forms of the Company’s 1.875% Senior Notes due 2014, 2.50% Senior Notes due 2016, 3.875% Senior Notes due 2021 and 5.15% Senior Notes due 2041. (Filed as an exhibit to Form 8-K on November 10, 2011 and incorporated herein by reference.)
4.16	Officers’ Certificate of Amgen Inc., dated December 5, 2011, including forms of the Company’s 4.375% Senior Notes due 2018 and 5.50% Senior Notes due 2026. (Filed as an exhibit to Form 8-K on December 5, 2011 and incorporated herein by reference.)

40

Exhibit No.	Description
4.17	Officers’ Certificate of Amgen Inc., dated May 15, 2012, including forms of the Company’s 2.125% Senior Notes due 2017, 3.625% Senior Notes due 2022 and 5.375% Senior Notes due 2043. (Filed as an exhibit to Form 8-K on May 15, 2012 and incorporated herein by reference.)
4.18	Officers’ Certificate of Amgen Inc., dated September 13, 2012, including forms of the Company’s 2.125% Senior Notes due 2019 and 4.000% Senior Notes due 2029. (Filed as an exhibit to Form 8-K on September 13, 2012 and incorporated herein by reference.)
4.19	Indenture, dated May 22, 2014, between Amgen Inc. and The Bank of New York Mellon Trust Company, N.A., as Trustee. (Filed as an exhibit to Form 8-K on May 22, 2014 and incorporated herein by reference.)
4.20	Officers’ Certificate of Amgen Inc., dated May 22, 2014, including forms of the Company’s Senior Floating Rate Notes due 2017, Senior Floating Rate Notes due 2019, 1.250% Senior Notes due 2017, 2.200% Senior Notes due 2019 and 3.625% Senior Notes due 2024. (Filed as an exhibit to Form 8-K on May 22, 2014 and incorporated herein by reference.)
4.21	Officer’s Certificate of Amgen Inc., dated May 1, 2015, including forms of the Company’s 2.125% Senior Notes due 2020, 2.700% Senior Notes due 2022, 3.125% Senior Notes due 2025 and 4.400% Senior Notes due 2045. (Filed as an exhibit on Form 8-K on May 1, 2015 and incorporated herein by reference.)
4.22	Officer’s Certificate of Amgen Inc., dated as of February 25, 2016, including forms of the Company’s 1.250% Senior Notes due 2022 and 2.000% Senior Notes due 2026. (Filed as an exhibit on Form 8-K on February 26, 2016 and incorporated herein by reference.)
4.23	Form of Permanent Global Certificate for the Company’s 0.410% bonds due 2023. (Filed as an exhibit on Form 8-K on March 8, 2016 and incorporated herein by reference.)
4.24	Terms of the Bonds for the Company’s 0.410% bonds due 2023. (Filed as an exhibit on Form 8-K on March 8, 2016 and incorporated herein by reference.)
4.25	Officer’s Certificate of Amgen Inc., dated as of June 14, 2016, including forms of the Company’s 4.563% Senior Notes due 2048 and 4.663% Senior Notes due 2051. (Filed as an exhibit to Form 8-K on June 14, 2016 and incorporated herein by reference.)
4.26	Registration Rights Agreement, dated as of June 14, 2016, by and among Amgen Inc., Credit Suisse Securities (USA) LLC, J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Mizuho Securities USA Inc., as lead dealer managers, and Drexel Hamilton, LLC and The Williams Capital Group, L.P., as co-dealer managers. (Filed as an exhibit to Form 8-K on June 14, 2016 and incorporated herein by reference.)
10.1+	Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (Filed as Appendix C to the Definitive Proxy Statement on Schedule 14A on April 8, 2013 and incorporated herein by reference.)
10.2+	First Amendment to Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, effective March 4, 2015. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2015 on April 27, 2015 and incorporated herein by reference.)
10.3+	Second Amendment to Amgen Inc. Amended and Restated 2009 Equity Incentive Plan, effective March 2, 2016. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2016 on May 2, 2016 and incorporated herein by reference.)
10.4+	Form of Stock Option Agreement for the Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (As Amended on March 2, 2016.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2016 on May 2, 2016 and incorporated herein by reference.)
10.5+	Form of Restricted Stock Unit Agreement for the Amgen Inc. Amended and Restated 2009 Equity Incentive Plan. (As Amended on March 2, 2016.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2016 on May 2, 2016 and incorporated herein by reference.)
10.6+	Amgen Inc. 2009 Performance Award Program. (As Amended on March 2, 2016.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2016 on May 2, 2016 and incorporated herein by reference.)
10.7+	Form of Performance Unit Agreement for the Amgen Inc. 2009 Performance Award Program. (As Amended on March 2, 2016.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2016 on May 2, 2016 and incorporated herein by reference.)
10.8+	Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on March 6, 2013.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 on May 3, 2013 and incorporated herein by reference.)

41

Exhibit No.	Description
10.9+	Form of Grant of Non-Qualified Stock Option Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (Filed as an exhibit to Form 8-K on May 8, 2009 and incorporated herein by reference.)
10.10+	Form of Restricted Stock Unit Agreement for the Amgen Inc. 2009 Director Equity Incentive Program. (As Amended on March 6, 2013.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 on May 3, 2013 and incorporated herein by reference.)
10.11+	Amgen Inc. Supplemental Retirement Plan. (As Amended and Restated effective October 16, 2013.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)
10.12+	Amended and Restated Amgen Change of Control Severance Plan. (As Amended and Restated effective December 9, 2010 and subsequently amended effective March 2, 2011.) (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 on May 10, 2011 and incorporated herein by reference.)
10.13+	Amgen Inc. Executive Incentive Plan. (As Amended and Restated effective January 1, 2009.) (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2008 on November 7, 2008 and incorporated herein by reference.)
10.14+	First Amendment to the Amgen Inc. Executive Incentive Plan, effective December 13, 2012. (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.)
10.15+	Amgen Nonqualified Deferred Compensation Plan. (As Amended and Restated effective October 16, 2013.) (Filed as an exhibit to Form 10-K for the year ended December 31, 2013 on February 24, 2014 and incorporated herein by reference.)
10.16+	Agreement between Amgen Inc. and David W. Meline, effective July 21, 2014. (Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2014 on October 29, 2014 and incorporated herein by reference.)
10.17+	Agreement between Amgen Inc. and Jonathan Graham, dated May 11, 2015. (Filed as an exhibit to Form 10-Q/A for the quarter ended June 30, 2015 on August 6, 2015 and incorporated herein by reference.)
10.18	Shareholders’ Agreement, dated May 11, 1984, among Amgen, Kirin Brewery Company, Limited and Kirin-Amgen, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.)
10.19	Amendment No. 1 dated March 19, 1985, Amendment No. 2 dated July 29, 1985 (effective July 1, 1985), and Amendment No. 3, dated December 19, 1985, to the Shareholders’ Agreement dated May 11, 1984. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2000 on August 1, 2000 and incorporated herein by reference.)
10.20	Amendment No. 4 dated October 16, 1986 (effective July 1, 1986), Amendment No. 5 dated December 6, 1986 (effective July 1, 1986), Amendment No. 6 dated June 1, 1987, Amendment No. 7 dated July 17, 1987 (effective April 1, 1987), Amendment No. 8 dated May 28, 1993 (effective November 13, 1990), Amendment No. 9 dated December 9, 1994 (effective June 14, 1994), Amendment No. 10 effective March 1, 1996, and Amendment No. 11 effective March 20, 2000 to the Shareholders’ Agreement, dated May 11, 1984. (Filed as exhibits to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.)
10.21	Amendment No. 12 to the Shareholders’ Agreement, dated January 31, 2001. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2005 on August 8, 2005 and incorporated herein by reference.)
10.22	Amendment No. 13 to the Shareholders’ Agreement, dated June 28, 2007 (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2007 on August 9, 2007 and incorporated herein by reference.)
10.23	Amendment No. 14 to the Shareholders’ Agreement, dated March 26, 2014. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2014 on April 30, 2014 and incorporated herein by reference.)
10.24	Assignment and License Agreement, dated October 16, 1986 (effective July 1, 1986), between Amgen and Kirin-Amgen, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.)
10.25	G-CSF United States License Agreement, dated June 1, 1987 (effective July 1, 1986), Amendment No. 1, dated October 20, 1988, and Amendment No. 2, dated October 17, 1991 (effective November 13, 1990), between Kirin-Amgen, Inc. and Amgen Inc. (Filed as exhibits to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.)

42

Exhibit No.	Description
10.26	G-CSF European License Agreement, dated December 30, 1986, between Kirin-Amgen and Amgen, Amendment No. 1 to Kirin-Amgen, Inc. / Amgen G-CSF European License Agreement, dated June 1, 1987, Amendment No. 2 to Kirin-Amgen, Inc. / Amgen G-CSF European License Agreement, dated March 15, 1998, Amendment No. 3 to Kirin-Amgen, Inc. / Amgen G-CSF European License Agreement, dated October 20, 1988, and Amendment No. 4 to Kirin-Amgen, Inc. / Amgen G-CSF European License Agreement, dated December 29, 1989, between Kirin-Amgen, Inc. and Amgen Inc. (Filed as exhibits to Form 10-K for the year ended December 31, 2000 on March 7, 2001 and incorporated herein by reference.)
10.27	Amended and Restated Promotion Agreement, dated December 16, 2001, by and among Immunex Corporation, American Home Products Corporation and Amgen Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Amendment No. 1 to Form S-4 Registration Statement on March 22, 2002 and incorporated herein by reference.)
10.28	Description of Amendment No. 1 to Amended and Restated Promotion Agreement, effective July 8, 2003, among Wyeth, Amgen Inc. and Immunex Corporation (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2003 on March 11, 2004 and incorporated herein by reference.)
10.29	Description of Amendment No. 2 to Amended and Restated Promotion Agreement, effective April 20, 2004, by and among Wyeth, Amgen Inc. and Immunex Corporation. (Filed as an exhibit to Amendment No. 1 to Form S-4 Registration Statement on June 29, 2004 and incorporated herein by reference.)
10.30	Amendment No. 3 to Amended and Restated Promotion Agreement, effective January 1, 2005, by and among Wyeth, Amgen Inc. and Immunex Corporation (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2005 on May 4, 2005 and incorporated herein by reference.)
10.31	Amended and Restated Credit Agreement, dated July 30, 2014, among Amgen Inc., the Banks therein named, Citibank, N.A., as administrative agent, and JPMorgan Chase Bank, N.A., as syndication agent (Filed as an exhibit to Form 8-K on July 30, 2014 and incorporated herein by reference.)
10.32	Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited dated May 10, 2002 (portions of the exhibit have been omitted pursuant to a request for confidential treatment) and Amendment No. 1, effective June 9, 2003, to Collaboration and License Agreement between Amgen Inc. and Celltech R&D Limited (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K/A for the year ended December 31, 2012 on July 31, 2013 and incorporated herein by reference.)
10.33	Sourcing and Supply Agreement, dated November 15, 2011, by and between Amgen USA Inc, a wholly owned subsidiary of Amgen Inc., and DaVita Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 on February 29, 2012 and incorporated herein by reference.)
10.34	Amendment Number 1 to Sourcing and Supply Agreement, effective January 1, 2013, by and between Amgen USA Inc., a wholly owned subsidiary of Amgen Inc., and DaVita Healthcare Partners Inc. f/k/a DaVita Inc. (portions of the exhibit have been omitted pursuant to a request for confidential treatment). (Filed as an exhibit to Form 10-K for the year ended December 31, 2012 on February 27, 2013 and incorporated herein by reference.)
10.35	Collaboration Agreement, dated April 22, 1994, by and between Bayer Corporation (formerly Miles, Inc.) and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2011 by Onyx Pharmaceuticals, Inc. on May 10, 2011 and incorporated herein by reference.)
10.36	Amendment to Collaboration Agreement, dated April 24, 1996, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)
10.37	Amendment to Collaboration Agreement, dated February 1, 1999, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2006 by Onyx Pharmaceuticals, Inc. on May 10, 2006 and incorporated herein by reference.)
10.38	Settlement Agreement and Release, dated October 11, 2011, by and between Bayer Corporation, Bayer AG, Bayer HealthCare LLC and Bayer Pharma AG and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)
10.39	Fourth Amendment to Collaboration Agreement, dated October 11, 2011, by and between Bayer Corporation and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-K for the year ended December 31, 2011 by Onyx Pharmaceuticals, Inc. on February 27, 2012 and incorporated herein by reference.)

43

Exhibit No.	Description
10.40	Side Letter Regarding Collaboration Agreement, dated May 29, 2015, by and between Bayer HealthCare LLC and Onyx Pharmaceuticals, Inc. (Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2015 on August 5, 2015 and incorporated herein by reference.)
10.41	Term Loan Facility Credit Agreement, dated September 20, 2013, among Amgen Inc., the Banks therein named, Bank of America, N.A., as Administrative Agent, and Barclays Bank PLC and JPMorgan Chase Bank, N.A., as Syndication Agents. (Filed as an exhibit to Form 8-K on September 20, 2013 and incorporated herein by reference.)
31*	Rule 13a-14(a) Certifications.
32**	Section 1350 Certifications.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

____________________________

(* = filed herewith)

(** = furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended)

(+ = management contract or compensatory plan or arrangement)

44

EX-31

Exhibit 31

CERTIFICATIONS

I, Robert A. Bradway, Chairman of the Board, Chief Executive Officer and President of Amgen Inc., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Amgen Inc.;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly 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 quarterly report based on such evaluation; and

(d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 29, 2016	/s/ ROBERT A. BRADWAY
	Robert A. Bradway
	Chairman of the Board,
	Chief Executive Officer and President

1

CERTIFICATIONS

I, David W. Meline, Executive Vice President and Chief Financial Officer of Amgen Inc., certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Amgen Inc.;

2. Based on my knowledge, this quarterly 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 quarterly report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly 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 quarterly report based on such evaluation; and

(d) Disclosed in this quarterly report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: July 29, 2016	/s/ DAVID W. MELINE
	David W. Meline
	Executive Vice President and Chief Financial Officer

2

EX-32

Exhibit 32

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Amgen Inc. (the “Company”) hereby certifies that:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 29, 2016	/s/ ROBERT A. BRADWAY
	Robert A. Bradway
	Chairman of the Board,
	Chief Executive Officer and President

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Amgen Inc. and will be retained by Amgen Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

1

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of Amgen Inc. (the “Company”) hereby certifies that:

(i) the accompanying Quarterly Report on Form 10-Q of the Company for the period ended June 30, 2016 (the “Report”) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and

(ii) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: July 29, 2016	/s/ DAVID W. MELINE
	David W. Meline
	Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906 of the Sarbanes-Oxley Act of 2002 (“Section 906”), or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Amgen Inc. and will be retained by Amgen Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2016	Jul. 25, 2016
Document and Entity Information [Abstract]
Entity Registrant Name	Amgen Inc.
Entity Central Index Key	0000318154
Document Type	10-Q
Document Period End Date	Jun. 30, 2016
Amendment Flag	false
Document Fiscal Year Focus	2016
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		748,360,906

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Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Revenues:
Product sales	$ 5,474	$ 5,225	$ 10,713	$ 10,099
Other revenues	214	145	502	304
Total revenues	5,688	5,370	11,215	10,403
Operating expenses:
Cost of sales	1,050	1,089	2,068	2,122
Research and development	900	964	1,772	1,858
Selling, general and administrative	1,292	1,160	2,495	2,186
Other	66	81	98	139
Total operating expenses	3,308	3,294	6,433	6,305
Operating income	2,380	2,076	4,782	4,098
Interest expense, net	313	277	607	529
Interest and other income, net	137	198	287	304
Income before income taxes	2,204	1,997	4,462	3,873
Provision for income taxes	334	344	692	597
Net income	$ 1,870	$ 1,653	$ 3,770	$ 3,276
Earnings per share:
Basic (in usd per share)	$ 2.49	$ 2.18	$ 5.01	$ 4.30
Diluted (in usd per share)	$ 2.47	$ 2.15	$ 4.97	$ 4.26
Shares used in calculation of earnings per share:
Basic (in shares)	751	760	753	761
Diluted (in shares)	756	768	759	769
Dividends paid per share (in usd per share)	$ 1.00	$ 0.79	$ 2.0	$ 1.58

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 1,870	$ 1,653	$ 3,770	$ 3,276
Other comprehensive income (loss), net of reclassification adjustments and taxes:
Foreign currency translation (losses) gains	(17)	18	16	(155)
Effective portion of cash flow hedges	(6)	(115)	(185)	63
Net unrealized gains (losses) on available-for-sale securities	184	(108)	542	32
Other	1	0	1	0
Other comprehensive income (loss), net of taxes	162	(205)	374	(60)
Comprehensive income	$ 2,032	$ 1,448	$ 4,144	$ 3,216

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Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Current assets:
Cash and cash equivalents	$ 2,630	$ 4,144
Marketable securities	32,404	27,238
Trade receivables, net	3,078	2,995
Inventories	2,671	2,435
Other current assets	2,164	1,703
Total current assets	42,947	38,515
Property, plant and equipment, net	4,884	4,907
Intangible assets, net	11,068	11,641
Goodwill	14,799	14,787
Other assets	1,773	1,599
Total assets	75,471	71,449
Current liabilities:
Accounts payable	870	965
Accrued liabilities	4,666	5,452
Current portion of long-term debt	5,294	2,247
Total current liabilities	10,830	8,664
Long-term debt	27,928	29,182
Long-term deferred tax liability	2,598	2,239
Other noncurrent liabilities	3,982	3,281
Contingencies and commitments
Stockholders’ equity:
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding—748.9 shares in 2016 and 754.0 shares in 2015	30,595	30,649
Accumulated deficit	(356)	(2,086)
Accumulated other comprehensive loss	(106)	(480)
Total stockholders’ equity	30,133	28,083
Total liabilities and stockholders’ equity	$ 75,471	$ 71,449

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2016	Dec. 31, 2015
Statement of Financial Position [Abstract]
Common stock and additional paid-in capital, par value (in usd per share)	$ 0.0001	$ 0.0001
Common stock and additional paid-in capital, shares authorized	2,750,000,000.0	2,750,000,000
Common stock and additional paid-in capital, shares outstanding	748,900,000	754,000,000

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015
Cash flows from operating activities:
Net income	$ 3,770	$ 3,276
Depreciation and amortization	1,043	1,043
Share-based compensation expense	139	160
Deferred income taxes	245	(126)
Other items, net	42	5
Changes in operating assets and liabilities, net of acquisitions:
Trade receivables, net	(119)	(199)
Inventories	(156)	196
Other assets	(330)	85
Accounts payable	(100)	(198)
Accrued income taxes	(328)	369
Other liabilities	386	155
Net cash provided by operating activities	4,592	4,766
Cash flows from investing activities:
Purchases of property, plant and equipment	(344)	(251)
Purchases of intangible assets	(99)	(50)
Proceeds from the sale of property, plant and equipment	14	226
Purchases of marketable securities	(14,969)	(13,530)
Proceeds from sales of marketable securities	9,063	8,021
Proceeds from maturities of marketable securities	1,339	2,500
Other	(51)	(227)
Net cash used in investing activities	(5,047)	(3,311)
Cash flows from financing activities:
Net proceeds from issuance of debt	2,908	3,464
Repayment of debt	(1,000)	(2,150)
Repurchases of common stock	(1,218)	(940)
Dividends paid	(1,504)	(1,201)
Settlement of contingent consideration obligation	0	(225)
Withholding taxes arising from shares withheld for share-based payments	(262)	(390)
Other	17	51
Net cash used in financing activities	(1,059)	(1,391)
(Decrease) increase in cash and cash equivalents	(1,514)	64
Cash and cash equivalents at beginning of period	4,144	3,731
Cash and cash equivalents at end of period	$ 2,630	$ 3,795

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Summary of significant accounting policies

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Summary of significant accounting policies

Summary of significant accounting policies

Business

Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics.

Basis of presentation

The financial information for the three and six months endedJune 30, 2016 and 2015, is unaudited but includes all adjustments (consisting of only normal recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year.

The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2015, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2016.

Principles of consolidation

The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in anyvariable interest entities. All material intercompany transactions and balances have been eliminated in consolidation.

Use of estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

Property, plant and equipment, net

Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $7.5 billion and $7.3 billion as of June 30, 2016, and December 31, 2015, respectively.

Recent accounting pronouncements and reclassifications

During the first quarter of 2016, we adopted a new accounting standard that amends the presentation for debt issuance costs. See Note 9, Financing arrangements.

During the first quarter of 2016, we adopted a new accounting standard that amends certain aspects of the accounting for employee share-based payments. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. See Note 4, Income taxes. Previously, such amounts were recognized as increases and decreases in common stock and additional paid-in capital. This aspect of the standard was adopted prospectively, and accordingly, the Provision for income taxes for the three and six months endedJune 30, 2016, includes $37 million and $114 million, respectively, of excess tax benefits arising from share-based payments. The new standard also amends the presentation of employee share-based payment-related items in the statement of cash flows by requiring (i) that excess income tax benefits and deficiencies be classified in cash flows from operating activities (such amounts were previously included in cash flows from financing activities) and (ii) that cash paid to taxing authorities arising from the withholding of shares from employees be classified in cash flows from financing activities (such amounts were previously included in cash flows from operating activities). We adopted the aspects of the standard affecting the cash flow presentation retrospectively, and accordingly, to conform to the current year presentation, in the Condensed Consolidated Statement of Cash Flows for the six months endedJune 30, 2015, we reclassified: (a) $233 million of excess tax benefits from Net cash used in financing activities to Net cash provided by operating activities and (b) $390 million of cash paid to taxing authorities arising from withholding of shares from employees from Net cash provided by operating activities to Net cash used in financing activities.

In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB has subsequently issued additional clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. We are currently evaluating the impact that the revenue standards will have on our consolidated financial statements and determining the transition method that we will apply.

In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value, with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets are presented at the net amount expected to be collected. This new standard also requires that credit losses related to available-for-sale debt securities be recorded through an allowance for such losses rather than reducing the carrying amount under the current other-than-temporary-impairment model. The new standard is effective for interim and annual periods beginning on January 1, 2020. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

Certain amounts in the Condensed Consolidated Statement of Cash Flows for the six months endedJune 30, 2015, have been reclassified from Accounts payable to Other liabilities within Changes in operating assets and liabilities, net of acquisitions to conform to the current year presentation.

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Restructuring

6 Months Ended

Jun. 30, 2016

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

We continue to execute on the transformation and process improvement efforts announced in 2014. As part of these efforts, we committed to a more agile and efficient operating model. Our transformation and process improvement efforts across the Company are enabling us to reallocate resources to fund many of our innovative pipeline and growth opportunities that will deliver value to patients and stockholders. These efforts include a restructuring, which is also delivering cost savings and funding investments. As part of the restructuring, we are closing or have closed our facilities in Washington state and Colorado and reducing the number of buildings we occupy at our headquarters in Thousand Oaks, California, as well as at other locations.

We continue to estimate that we will incur $800 million to $900 million of pre-tax charges in connection with our restructuring, including (i) separation and other headcount-related costs of $535 million to $585 million with respect to staff reductions and (ii) asset-related charges of $265 million to $315 million consisting primarily of asset impairments, accelerated depreciation and other related costs resulting from the consolidation of our worldwide facilities. Through June 30, 2016, we have incurred $471 million of separation and other headcount-related costs and $213 million of asset-related charges. We expect that we will incur most of the remaining estimated costs during the remainder of 2016 and in 2017 in order to support our ongoing transformation and process improvement efforts.

The amounts related to the restructuring recorded in the Condensed Consolidated Statements of Income during the three and six months endedJune 30, 2016, were not significant. As of June 30, 2016, the total restructuring liability decreased to $35 million due primarily to payments related to separation costs.

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Business combinations

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Business combinations

Business combinations

Dezima Pharma B.V.

On October 14, 2015, we acquired all of the outstanding stock of Dezima Pharma B.V. (Dezima), a privately-held, Netherlands-based biotechnology company focused on developing innovative treatments for dyslipidemia. Dezima’s lead molecule is AMG 899 (formerly TA-8995), an oral, once-daily cholesteryl ester transfer protein inhibitor that has completed certain phase 2 trials. This transaction was accounted for as a business combination. Upon its acquisition, Dezima became a wholly owned subsidiary of Amgen, and its operations have been included in our consolidated financial statements commencing on the acquisition date.

The aggregate acquisition date consideration to acquire Dezima consisted of (in millions):

Total cash paid to former shareholders of Dezima	$	300
Fair value of contingent consideration obligations	110
Total consideration	$	410

In connection with this acquisition, we are obligated to make additional payments to the former shareholders of Dezima of up to $1.25 billion contingent upon the achievement of certain development and sales-related milestones. In addition, low-single-digit royalties will be paid on net product sales above a certain threshold. The estimated fair values of the contingent consideration obligations aggregated to $110 million as of the acquisition date.See Note 11, Fair value measurement.

The fair values of assets acquired and liabilities assumed included primarily in-process research and development (IPR&D) of $400 million, goodwill of $108 million and deferred tax liabilities of $100 million. This valuation reflects delayed development pending competitor clinical trials in this class.

Pro forma results of operations for this acquisition have not been presented because the acquisition is not material to our consolidated results of operations.

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Income taxes

6 Months Ended

Jun. 30, 2016

Income Tax Disclosure [Abstract]

Income taxes

Income taxes

The effective tax rates for the three and six months endedJune 30, 2016, were 15.2% and 15.5%, respectively, compared with 17.2% and 15.4% for the corresponding periods of the prior year. The effective rates differ from the federal statutory rates primarily as a result of indefinitely invested earnings of our foreign operations. We do not provide for U.S. income taxes on undistributed earnings of our foreign operations that are intended to be invested indefinitely outside the United States.

The decrease in our effective tax rate for the three months endedJune 30, 2016, was due primarily to the favorable tax impact of discrete benefits associated with tax incentives and the adoption of a new accounting standard that amends certain aspects of the accounting for employee share-based compensation payments. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. The decrease was offset partially by the unfavorable tax impact of the changes in the jurisdictional mix of income and expenses.

The increase in our effective tax rate for the six months endedJune 30, 2016, was due primarily to the unfavorable tax impact of changes in the jurisdictional mix of income and expenses and by a state tax audit settlement in the three months ended March 31, 2015. The increase was offset partially by discrete benefits associated with tax incentives and the adoption of a new accounting standard that amends certain aspects of the accounting for employee share-based compensation payments.

Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturer in Puerto Rico. The rate is 4.0% effective through December 31, 2017. We account for the excise tax as a manufacturing cost that is capitalized in inventory and expensed in cost of sales when the related products are sold. For U.S. income tax purposes, the excise tax results in foreign tax credits that are generally recognized in our provision for income taxes when the excise tax is incurred.

One or more of our legal entities file income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions and certain foreign jurisdictions. Our income tax returns are routinely audited by the tax authorities in those jurisdictions. Significant disputes may arise with these tax authorities involving issues of the timing and amount of deductions, the use of tax credits and allocations of income and expenses among various tax jurisdictions because of differing interpretations of tax laws and regulations.

We are no longer subject to U.S. federal income tax examinations for years ended on or before December 31, 2009, or to California state income tax examinations for years ended on or before December 31, 2008. We are currently under audit in several jurisdictions, including a U.S. federal income tax examination for tax years ended December 31, 2010, 2011, and 2012. Tax audits can involve complex issues, interpretations and judgments, and their resolution can take many years, particularly if subject to negotiation or litigation. Our assessments of uncertain tax benefits are based on information available to us at this time, including estimates and assumptions that have been deemed appropriate by management but may not be representative of final audit resolutions.

During the three and six months endedJune 30, 2016, the gross amount of our unrecognized tax benefits (UTBs) increased by approximately $110 million and $220 million, respectively, as a result of tax positions taken during the current year. Substantially all of the UTBs as of June 30, 2016, if recognized, would affect our effective tax rate.

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Earnings per share

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Earnings per share

Earnings per share

The computation of basic earnings per share (EPS) is based on the weighted-average number of our common shares outstanding. The computation of diluted EPS is based on the weighted-average number of our common shares outstanding and dilutive potential common shares, which include principally shares that may be issued under our stock option, restricted stock and performance unit awards, as determined using the treasury stock method (collectively, dilutive securities).

The computations for basic and diluted EPS were as follows (in millions, except per share data):

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Income (Numerator):
Net income for basic and diluted EPS	$	1,870	$	1,653	$	3,770	$	3,276
Shares (Denominator):
Weighted-average shares for basic EPS	751		760		753		761
Effect of dilutive securities	5		8		6		8
Weighted-average shares for diluted EPS	756		768		759		769
Basic EPS	$	2.49	$	2.18	$	5.01	$	4.30
Diluted EPS	$	2.47	$	2.15	$	4.97	$	4.26

For the three and six months endedJune 30, 2016 and 2015, the number of anti-dilutive employee share-based awards excluded from the computation of diluted EPS was not significant.

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Available-for-sale investments

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Available-for-sale investments

Available-for-sale investments

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions):

Type of security as of June 30, 2016	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	7,916	$	104	$	—		$	8,020
Other government-related debt securities:
U.S.	345		2		—			347
Foreign and other	1,814		54		(2		)	1,866
Corporate debt securities:
Financial	8,120		121		(3		)	8,238
Industrial	8,345		141		(13		)	8,473
Other	1,002		17		(1		)	1,018
Residential mortgage-backed securities	1,729		15		(6		)	1,738
Other mortgage- and asset-backed securities	2,197		10		(27		)	2,180
Money market mutual funds	1,673		—		—			1,673
Other short-term interest-bearing securities	1,014		—		—			1,014
Total interest-bearing securities	34,155		464		(52		)	34,567
Equity securities	89		34		—			123
Total available-for-sale investments	$	34,244	$	498	$	(52	)	$	34,690

Type of security as of December 31, 2015	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	4,298	$	—	$	(24	)	$	4,274
Other government-related debt securities:
U.S.	536		—		(2		)	534
Foreign and other	1,768		7		(36		)	1,739
Corporate debt securities:
Financial	7,904		7		(40		)	7,871
Industrial	7,961		11		(136		)	7,836
Other	905		1		(21		)	885
Residential mortgage-backed securities	1,484		1		(15		)	1,470
Other mortgage- and asset-backed securities	2,524		—		(55		)	2,469
Money market mutual funds	3,370		—		—			3,370
Other short-term interest-bearing securities	528		—		—			528
Total interest-bearing securities	31,278		27		(329		)	30,976
Equity securities	88		48		—			136
Total available-for-sale investments	$	31,366	$	75	$	(329	)	$	31,112

The fair values of available-for-sale investments by classification in the Condensed Consolidated Balance Sheets were as follows (in millions):

Classification in the Condensed Consolidated Balance Sheets	June 30, 2016		December 31, 2015
Cash and cash equivalents	$	2,163	$	3,738
Marketable securities	32,404		27,238
Other assets — noncurrent	123		136
Total available-for-sale investments	$	34,690	$	31,112

Cash and cash equivalents in the above table excludes cash of $467 million and $406 million as of June 30, 2016, and December 31, 2015, respectively.

The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions):

Contractual maturity	June 30, 2016		December 31, 2015
Maturing in one year or less	$	3,965	$	4,578
Maturing after one year through three years	11,141		9,370
Maturing after three years through five years	12,155		9,932
Maturing after five years through ten years	3,335		3,087
Maturing after ten years	53		70
Mortgage- and asset-backed securities	3,918		3,939
Total interest-bearing securities	$	34,567	$	30,976

For the three months endedJune 30, 2016 and 2015, realized gains totaled $31 million and $18 million, respectively, and realized losses totaled $54 million and $27 million, respectively. For the six months ended June 30, 2016 and 2015, realized gains totaled $68 million and $54 million, respectively, and realized losses totaled $121 million and $98 million, respectively. The cost of securities sold is based on the specific identification method.

The unrealized losses on available-for-sale investments and their related fair values were as follows (in millions):

	Less than 12 months					12 months or greater
Type of security as of June 30, 2016	Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities	$	174	$	—		$	—	$	—
Other government-related debt securities:
Foreign and other	53		(1		)	67		(1		)
Corporate debt securities:
Financial	420		(2		)	171		(1		)
Industrial	884		(8		)	405		(5		)
Other	64		—			31		(1		)
Residential mortgage-backed securities	100		(1		)	289		(5		)
Other mortgage- and asset-backed securities	168		(4		)	481		(23		)
Equity securities	1		—			—		—
Total	$	1,864	$	(16	)	$	1,444	$	(36	)

	Less than 12 months					12 months or greater
Type of security as of December 31, 2015	Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities	$	4,196	$	(24	)	$	—	$	—
Other government-related debt securities:
U.S.	494		(2		)	20		—
Foreign and other	1,306		(32		)	56		(4		)
Corporate debt securities:
Financial	5,988		(38		)	228		(2		)
Industrial	5,427		(108		)	679		(28		)
Other	807		(19		)	39		(2		)
Residential mortgage-backed securities	804		(8		)	304		(7		)
Other mortgage- and asset-backed securities	1,834		(19		)	561		(36		)
Total	$	20,856	$	(250	)	$	1,887	$	(79	)

The primary objective of our investment portfolio is to enhance overall returns in an efficient manner while maintaining safety of principal, prudent levels of liquidity and acceptable levels of risk. Our investment policy limits interest-bearing security investments to certain types of debt and money market instruments issued by institutions with primarily investment-grade credit ratings, and it places restrictions on maturities and concentration by asset class and issuer.

We review our available-for-sale investments for other-than-temporary declines in fair value below our cost basis each quarter and whenever events or changes in circumstances indicate that the cost basis of an asset may not be recoverable. This evaluation is based on a number of factors, including the length of time and the extent to which the fair value has been below our cost basis and adverse conditions related specifically to the security, including any changes to the credit rating of the security, and the intent to sell, or whether we will more likely than not be required to sell, the security before recovery of its amortized cost basis. Our assessment of whether a security is other-than-temporarily impaired could change in the future based on new developments or changes in assumptions related to any particular security. As of June 30, 2016, and December 31, 2015, we believe the cost bases for our available-for-sale investments were recoverable in all material respects.

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Inventories

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories consisted of the following (in millions):

	June 30, 2016		December 31, 2015
Raw materials	$	205	$	201
Work in process	1,510		1,529
Finished goods	956		705
Total inventories	$	2,671	$	2,435

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Goodwill and other intangible assets

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and other intangible assets

Goodwill and other intangible assets

Goodwill

Changes in the carrying amounts of goodwill were as follows (in millions):

	Six months ended June 30,
	2016		2015
Beginning balance	$	14,787	$	14,788
Goodwill related to acquisitions of businesses(1)	2		—
Currency translation adjustments	10		(65		)
Ending balance	$	14,799	$	14,723

⁽¹⁾  Consists of goodwill recognized on the acquisition dates of business combinations and subsequent adjustments to these amounts resulting from changes to the acquisition date fair values of net assets acquired in the business combinations recorded during their respective measurement periods.

Identifiable intangible assets

Identifiable intangible assets consisted of the following (in millions):

	June 30, 2016							December 31, 2015
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Finite-lived intangible assets:
Developed product technology rights	$	12,313	$	(5,472	)	$	6,841	$	12,310	$	(4,996	)	$	7,314
Licensing rights	3,275		(1,149		)	2,126		3,275		(998		)	2,277
Research and development technology rights	1,138		(675		)	463		1,134		(635		)	499
Marketing-related rights	1,349		(726		)	623		1,186		(650		)	536
Total finite-lived intangible assets	18,075		(8,022		)	10,053		17,905		(7,279		)	10,626
Indefinite-lived intangible assets:
IPR&D	1,015		—			1,015		1,015		—			1,015
Total identifiable intangible assets	$	19,090	$	(8,022	)	$	11,068	$	18,920	$	(7,279	)	$	11,641

Developed product technology rights consist of rights related to marketed products acquired in business combinations. Licensing rights consist primarily of contractual rights acquired in business combinations to receive future milestones, royalties and profit sharing payments, capitalized payments to third parties for milestones related to regulatory approvals to commercialize products and up-front payments associated with royalty obligations for marketed products. Research and development (R&D) technology rights consist of technology used in R&D with alternative future uses. Marketing-related intangible assets consist primarily of rights related to the sale and distribution of marketed products.

IPR&D consists of R&D projects acquired in a business combination that are not complete at the time of acquisition due to remaining technological risks and/or lack of receipt of required regulatory approvals. As of June 30, 2016, the projects include primarily AMG 899, acquired in the acquisition of Dezima (see Note 3, Business combinations); oprozomib, acquired in the acquisition of Onyx Pharmaceuticals, Inc. (Onyx); and Parsabiv^™ (etelcalcetide), acquired in the acquisition of KAI Pharmaceuticals.

All IPR&D projects have major risks and uncertainties associated with the timely and successful completion of development and commercialization of these product candidates, including our ability to confirm their safety and efficacy based on data from clinical trials, our ability to obtain necessary regulatory approvals and our ability to successfully complete these tasks within budgeted costs. We are not permitted to market a human therapeutic without obtaining regulatory approvals, and such approvals require our completing clinical trials that demonstrate a product candidate is safe and effective. In addition, the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans, as well as competitive product launches, impact the revenues a product can generate. Consequently, the eventual realized value, if any, of these acquired IPR&D projects may vary from their estimated fair values. We review IPR&D projects for impairment annually, whenever events or changes in circumstances indicate that the carrying amount may not be recoverable and upon the establishment of technological feasibility or regulatory approval.

During the three months endedJune 30, 2016 and 2015, we recognized amortization charges associated with our finite-lived intangible assets of $371 million and $345 million, respectively. During the six months endedJune 30, 2016 and 2015, we recognized amortization charges associated with our finite-lived intangible assets of $740 million and $686 million, respectively. The total estimated amortization charges for our finite-lived intangible assets for the remaining six months ending December 31, 2016, and the years ending December 31, 2017, 2018, 2019, 2020 and 2021, are $0.7 billion, $1.3 billion, $1.2 billion, $1.1 billion, $1.0 billion and $0.9 billion, respectively.

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Financing arrangements

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Financing arrangements

Financing arrangements

The principal amounts, fixed contractual coupon rates and aggregate carrying value of our long-term borrowings were as follows (in millions):

	June 30, 2016			December 31, 2015
2.30% notes due 2016 (2.30% 2016 Notes)	$	—		$	750
2.50% notes due 2016 (2.50% 2016 Notes)	1,000			1,000
2.125% notes due 2017 (2.125% 2017 Notes)	1,250			1,250
Floating Rate Notes due 2017	600			600
1.25% notes due 2017 (1.25% 2017 Notes)	850			850
5.85% notes due 2017 (5.85% 2017 Notes)	1,100			1,100
6.15% notes due 2018 (6.15% 2018 Notes)	500			500
Term Loan due 2018 (Term Loan)	1,725			1,975
4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes)	606			599
5.70% notes due 2019 (5.70% 2019 Notes)	1,000			1,000
Floating Rate Notes due 2019	250			250
2.20% notes due 2019 (2.20% 2019 Notes)	1,400			1,400
2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes)	750			733
4.50% notes due 2020 (4.50% 2020 Notes)	300			300
2.125% notes due 2020 (2.125% 2020 Notes)	750			750
3.45% notes due 2020 (3.45% 2020 Notes)	900			900
4.10% notes due 2021 (4.10% 2021 Notes)	1,000			1,000
3.875% notes due 2021 (3.875% 2021 Notes)	1,750			1,750
1.25% euro-denominated notes due 2022 (1.25% 2022 euro Notes)	1,388			—
2.70% notes due 2022 (2.70% 2022 Notes)	500			500
3.625% notes due 2022 (3.625% 2022 Notes)	750			750
0.41% Swiss-franc-denominated bonds due 2023 (0.41% 2023 Swiss franc Bonds)	717			—
3.625% notes due 2024 (3.625% 2024 Notes)	1,400			1,400
3.125% notes due 2025 (3.125% 2025 Notes)	1,000			1,000
2.00% euro-denominated notes due 2026 (2.00% 2026 euro Notes)	833			—
5.50% pound-sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes)	633			700
4.00% pound-sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes)	932			1,032
6.375% notes due 2037 (6.375% 2037 Notes)	552			900
6.90% notes due 2038 (6.90% 2038 Notes)	291			500
6.40% notes due 2039 (6.40% 2039 Notes)	466			1,000
5.75% notes due 2040 (5.75% 2040 Notes)	412			700
4.95% notes due 2041 (4.95% 2041 Notes)	600			600
5.15% notes due 2041 (5.15% 2041 Notes)	974			2,250
5.65% notes due 2042 (5.65% 2042 Notes)	487			1,250
5.375% notes due 2043 (5.375% 2043 Notes)	261			1,000
4.40% notes due 2045 (4.40% 2045 Notes)	1,250			1,250
4.563% notes due 2048 (4.563% 2048 Notes)	1,415			—
4.663% notes due 2051 (4.663% 2051 Notes)	3,541			—
Other notes	100			100
Unamortized bond discounts and issuance costs	(1,011		)	(210		)
Total carrying value of debt	$	33,222		$	31,429
Less current portion	(5,294		)	(2,247		)
Total noncurrent debt	$	27,928		$	29,182

The principal amounts of notes denominated in foreign currencies in the above table include €550 million of 4.375% 2018 euro Notes, €675 million of 2.125% 2019 euro Notes, €1,250 million of 1.25% 2022 euro Notes, CHF700 million of 0.41% 2023 Swiss franc Bonds, €750 million of 2.00% 2026 euro Notes, £475 million of 5.50% 2026 pound sterling Notes and £700 million of 4.00% 2029 pound sterling Notes.

There are no material differences between the effective interest rates and coupon rates of any of our borrowings, except for the 4.563% 2048 Notes and the 4.663% 2051 Notes, which have effective interest rates of approximately 6.3% and 5.6%, respectively.

During the first quarter of 2016, we retrospectively adopted a new accounting standard that amends the presentation of debt issuance costs. Such costs are now presented as a direct deduction from the carrying amount of the debt liability and not as deferred charges presented as assets on our Condensed Consolidated Balance Sheets. As a result of adopting this new accounting standard, our Condensed Consolidated Balance Sheet at December 31, 2015, was restated to reflect this impact, which reduced both Other current assets and the Current portion of long-term debt by $3 million and both Other assets and Long-term debt by $124 million.

Debt repayments

During the six months endedJune 30, 2016, we repaid $250 million of principal on our Term Loan due 2018 and the $750 million aggregate principal amount of the 2.30% 2016 Notes.

Debt issuances

During the six months endedJune 30, 2016, we issued debt securities in the following offerings:

• In March 2016, we issued $704 million principal amount of bonds, consisting of the 0.41% 2023 Swiss franc Bonds (CHF700 million principal amount).

• In February 2016, we issued $2.2 billion aggregate principal amount of notes, consisting of the 1.25% 2022 euro Notes (€1,250 million principal amount) and the 2.00% 2026 euro Notes (€750 million principal amount).

Debt issuance costs incurred in connection with both issuances of debt totaling approximately $13 million are being amortized over the respective lives of the debt securities and the related charges are included in Interest expense, net, in the Condensed Consolidated Statements of Income.

In the event of a change-in-control triggering event, as defined, we may be required to purchase all or a portion of these debt securities (as well as the debt exchange issuances discussed below) at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. In addition, all of the euro-denominated notes issued during 2016 may be redeemed at any time at our option, in whole or in part, at the principal amount of the notes being redeemed plus accrued and unpaid interest and a make-whole amount, as defined. These euro-denominated notes may be redeemed without payment of a make-whole amount if they are redeemed on or after three months prior to their maturity date.

Debt exchange

During the three months ended June 30, 2016, we completed a private offering to exchange portions of certain outstanding senior notes due 2037 through 2043 (collectively, the Old Notes), listed below, for new senior notes, consisting of principal amounts of $1.4 billion of 4.563% 2048 Notes and $3.5 billion of 4.663% 2051 Notes (collectively, the New Notes).

The following principal amounts of each series of Old Notes were validly tendered and subsequently canceled (in millions):

	Principal Amount Exchanged
6.375% 2037 Notes	$	348
6.90% 2038 Notes	209
6.40% 2039 Notes	534
5.75% 2040 Notes	288
5.15% 2041 Notes	1,276
5.65% 2042 Notes	763
5.375% 2043 Notes	739

The New Notes bear lower fixed coupon rates while requiring higher principal repayments on extended maturity dates, compared with the Old Notes that were exchanged. There were no other significant changes to the terms between the Old Notes and the New Notes. The exchange is considered a debt modification, and there were no cash payments to or cash receipts from the note holders as a result of the exchange. Existing deferred financing costs associated with the Old Notes, as well as discounts associated with the New Notes aggregating $801 million, will be accreted over the term of the New Notes and recorded as Interest expense, net. Transaction costs of $24 million incurred for the exchange were expensed immediately in Interest and other income, net.

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Stockholders' equity

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Stockholders' equity

Stockholders’ equity

Stock repurchase program

Activity under our stock repurchase program, on a trade date basis, was as follows (in millions):

	2016			2015
	Shares	Dollars		Shares	Dollars
First quarter	4.7	$	690	2.9	$	451
Second quarter	3.9	591		3.3	515
	8.6	$	1,281	6.2	$	966

As of June 30, 2016, $3.6 billion remained available under our stock repurchase program.

Dividends

In July 2016, the Board of Directors declared a quarterly cash dividend of $1.00 per share of common stock, which will be paid in September 2016.

In March 2016 and December 2015, the Board of Directors declared quarterly cash dividends of $1.00 per share of common stock, which were paid in June 2016 and March 2016, respectively.

Accumulated other comprehensive income/(loss)

The components of accumulated other comprehensive income/(loss) (AOCI) were as follows (in millions):

	Foreign currency translation			Cash flow hedges			Available-for-sale securities			Other			AOCI
Balance as of December 31, 2015	$	(511	)	$	297		$	(260	)	$	(6	)	$	(480	)
Foreign currency translation adjustments	36			—			—			—			36
Unrealized (losses) gains	—			(117		)	379			—			262
Reclassification adjustments to income	—			(166		)	30			—			(136		)
Income taxes	(3		)	104			(51		)	—			50
Balance as of March 31, 2016	$	(478	)	$	118		$	98		$	(6	)	$	(268	)
Foreign currency translation adjustments	(22		)	—			—			—			(22		)
Unrealized (losses) gains	—			(144		)	268			—			124
Reclassification adjustments to income	—			133			23			—			156
Other	—			—			—			1			1
Income taxes	5			5			(107		)	—			(97		)
Balance as of June 30, 2016	$	(495	)	$	112		$	282		$	(5	)	$	(106	)

The reclassifications out of AOCI and into earnings were as follows (in millions):

	Amounts reclassified out of AOCI
Components of AOCI	Three months ended June 30, 2016			Three months ended June 30, 2015			Line item affected in the  Statements of Income
Cash flow hedges:
Foreign currency contract gains	$	79		$	91		Product sales
Cross-currency swap contract (losses) gains	(212		)	136			Interest and other income, net
Forward interest rate contract losses	—			(1		)	Interest expense, net
	(133		)	226			Total before income tax
	49			(81		)	Tax benefit (expense)
	$	(84	)	$	145		Net of taxes
Available-for-sale securities:
Net realized losses	$	(23	)	$	(9	)	Interest and other income, net
	8			3			Tax benefit
	$	(15	)	$	(6	)	Net of taxes

	Amounts reclassified out of AOCI
Components of AOCI	Six months ended June 30, 2016			Six months ended June 30, 2015			Line item affected in the  Statements of Income
Cash flow hedges:
Foreign currency contract gains	$	175		$	160		Product sales
Cross-currency swap contract losses	(142		)	(47		)	Interest and other income, net
Forward interest rate contract losses	—			(1		)	Interest expense, net
	33			112			Total before income tax
	(12		)	(40		)	Tax expense
	$	21		$	72		Net of taxes
Available-for-sale securities:
Net realized losses	$	(53	)	$	(44	)	Interest and other income, net
	8			16			Tax benefit
	$	(45	)	$	(28	)	Net of taxes

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Fair value measurement

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair value measurement

Fair value measurement

To estimate the fair value of our financial assets and liabilities, we use valuation approaches within a hierarchy that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing an asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company’s assumptions about the inputs that market participants would use in pricing an asset or liability and are developed based on the best information available in the circumstances. The fair value hierarchy is divided into three levels based on the source of inputs as follows:

Level 1	—	Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access
Level 2	—	Valuations for which all significant inputs are observable, either directly or indirectly, other than level 1 inputs
Level 3	—	Valuations based on inputs that are unobservable and significant to the overall fair value measurement

The availability of observable inputs can vary among the various types of financial assets and liabilities. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used for measuring fair value may fall into different levels of the fair value hierarchy. In such cases, for financial statement disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is categorized is based on the lowest level of input used that is significant to the overall fair value measurement.

The fair value of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis was as follows (in millions):

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Fair value measurement
as of June 30, 2016, using:							Total
Assets:
Available-for-sale investments:
U.S. Treasury securities	$	8,020	$	—	$	—	$	8,020
Other government-related debt securities:
U.S.	—		347		—		347
Foreign and other	—		1,866		—		1,866
Corporate debt securities:
Financial	—		8,238		—		8,238
Industrial	—		8,473		—		8,473
Other	—		1,018		—		1,018
Residential mortgage-backed securities	—		1,738		—		1,738
Other mortgage- and asset-backed securities	—		2,180		—		2,180
Money market mutual funds	1,673		—		—		1,673
Other short-term interest-bearing securities	—		1,014		—		1,014
Equity securities	123		—		—		123
Derivatives:
Foreign currency contracts	—		68		—		68
Cross-currency swap contracts	—		17		—		17
Interest rate swap contracts	—		266		—		266
Total assets	$	9,816	$	25,225	$	—	$	35,041
Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	27	$	—	$	27
Cross-currency swap contracts	—		456		—		456
Forward interest rate contracts	—		4		—		4
Contingent consideration obligations in connection with business combinations	—		—		171		171
Total liabilities	$	—	$	487	$	171	$	658

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Fair value measurement
as of December 31, 2015, using:							Total
Assets:
Available-for-sale investments:
U.S. Treasury securities	$	4,274	$	—	$	—	$	4,274
Other government-related debt securities:
U.S.	—		534		—		534
Foreign and other	—		1,739		—		1,739
Corporate debt securities:
Financial	—		7,871		—		7,871
Industrial	—		7,836		—		7,836
Other	—		885		—		885
Residential mortgage-backed securities	—		1,470		—		1,470
Other mortgage- and asset-backed securities	—		2,469		—		2,469
Money market mutual funds	3,370		—		—		3,370
Other short-term interest-bearing securities	—		528		—		528
Equity securities	136		—		—		136
Derivatives:
Foreign currency contracts	—		142		—		142
Interest rate swap contracts	—		71		—		71
Total assets	$	7,780	$	23,545	$	—	$	31,325
Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	8	$	—	$	8
Cross-currency swap contracts	—		250		—		250
Interest rate swap contracts	—		3		—		3
Contingent consideration obligations in connection with business combinations	—		—		188		188
Total liabilities	$	—	$	261	$	188	$	449

The fair values of our U.S. Treasury securities, money market mutual funds and equity securities are based on quoted market prices in active markets with no valuation adjustment.

Most of our other government-related and corporate debt securities are investment grade with maturity dates offiveyears or less from the balance sheet date. Our other government-related debt securities portfolio is composed of securities with weighted-average credit ratings of A or equivalent by Moody’s Investors Service, Inc. (Moody’s) and A- by Standard & Poor’s Financial Services LLC (S&P) or Fitch, Inc. (Fitch); and our corporate debt securities portfolio has a weighted-average credit rating of BBB+ or equivalent by S&P or Moody’s and A- by Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs.

Our residential mortgage-, other mortgage- and asset-backed securities portfolio is composed entirely of senior tranches, with credit ratings of AAA by S&P, Moody’s or Fitch. We estimate the fair values of these securities by taking into consideration valuations obtained from third-party pricing services. The pricing services utilize industry standard valuation models, including both income- and market-based approaches for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; prepayment/default projections based on historical data; and other observable inputs.

We value our other short-term interest-bearing securities at amortized cost, which approximates fair value given their near-term maturity dates.

All of our foreign currency forward and option derivatives contracts have maturities of three years or less, and all are with counterparties that have minimum credit ratings of A- or equivalent by S&P or Moody’s. We estimated the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that utilizes an income-based industry standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency rates, London Interbank Offered Rates (LIBOR), swap rates and obligor credit default swap rates. In addition, inputs for our foreign currency option contracts include implied volatility measures. These inputs, where applicable, are at commonly quoted intervals. See Note 12, Derivative instruments.

Our cross-currency swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P or Moody’s. We estimated the fair values of these contracts by taking into consideration valuations obtained from a third-party valuation service that utilizes an income-based industry standard valuation model for which all significant inputs are observable either directly or indirectly. These inputs include foreign currency exchange rates, LIBOR, swap rates, obligor credit default swap rates and cross-currency basis swap spreads. See Note 12, Derivative instruments.

Our interest rate swap contracts are with counterparties that have minimum credit ratings of A- or equivalent by S&P or Moody’s. We estimated the fair values of these contracts by using an income-based industry standard valuation model for which all significant inputs were observable either directly or indirectly. These inputs included LIBOR, swap rates and obligor credit default swap rates.

Contingent consideration obligations

As a result of our business acquisitions, we incurred contingent consideration obligations, as discussed below. These contingent consideration obligations are recorded at their estimated fair values, and we revalue these obligations each reporting period until the related contingencies are resolved. The fair value measurements of these obligations are based on significant unobservable inputs related to product candidates acquired in business combinations and are reviewed quarterly by management in our R&D and commercial sales organizations. These inputs include, as applicable, estimated probabilities and timing of achieving specified regulatory and commercial milestones and estimated annual sales. Significant changes that increase or decrease the probabilities of achieving the related regulatory and commercial events, shorten or lengthen the time required to achieve such events, or increase or decrease estimated annual sales would result in corresponding increases or decreases in the fair values of these obligations, as applicable. Changes in the fair values of contingent consideration obligations are recognized in Other operating expenses in the Condensed Consolidated Statements of Income.

Changes in the carrying amounts of contingent consideration obligations were as follows (in millions):

	Three months ended June 30,					Six months ended June 30,
	2016			2015		2016			2015
Beginning balance	$	194		$	215	$	188		$	215
Net changes in valuation	(23		)	—		(17		)	—
Ending balance	$	171		$	215	$	171		$	215

As a result of our acquisition of Dezima in October 2015, we are obligated to pay its former shareholders up to $1.25 billion of additional consideration contingent upon achieving certain development and sales-related milestones and low single-digit royalties on net product sales above a certain threshold. The estimated fair values of the contingent consideration obligations had an aggregate value of $110 million at acquisition. See Note 3, Business combinations.

As a result of our acquisition of BioVex Group, Inc. (BioVex), in March 2011, we are obligated to pay its former shareholders up to $325 million of additional consideration contingent if certain sales thresholds are achieved within specified periods of time.

We estimate the fair values of the obligations to former shareholders of Dezima and BioVex by using probability-adjusted discounted cash flows, and we review underlying key assumptions on a quarterly basis. There were no significant changes in the fair values of contingent consideration obligations during the three and six months ended June 30, 2016.

During the six months ended June 30, 2016 and 2015, there were no transfers of assets or liabilities between fair value measurement levels, and there were no material remeasurements to the fair values of assets and liabilities that are not measured at fair value on a recurring basis.

Summary of the fair values of other financial instruments

Cash equivalents

The estimated fair values of cash equivalents approximate their carrying values due to the short-term nature of such financial instruments.

Borrowings

We estimated the fair value of our long-term debt (Level 2) by taking into consideration indicative prices obtained from a third-party financial institution that utilizes industry standard valuation models, including both income- and market-based approaches, for which all significant inputs are observable either directly or indirectly. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; credit spreads; benchmark yields; foreign currency exchange rates, as applicable; and other observable inputs. As of June 30, 2016, and December 31, 2015, the aggregate fair values of our long-term debt were $36.8 billion and $33.1 billion, respectively, and the carrying values were $33.2 billion and $31.4 billion, respectively.

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Derivative instruments

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative instruments

Derivative instruments

The Company is exposed to foreign currency exchange rate risks and interest rate risks related to its business operations. To reduce our risks related to these exposures, we utilize or have utilized certain derivative instruments, including foreign currency forward, foreign currency option, cross-currency swap, forward interest rate and interest rate swap contracts. We do not use derivatives for speculative trading purposes.

Cash flow hedges

We are exposed to possible changes in the values of certain anticipated foreign currency cash flows resulting from changes in foreign currency exchange rates associated primarily with our euro-denominated international product sales. Increases and decreases in the cash flows associated with our international product sales due to movements in foreign currency exchange rates are offset partially by corresponding increases and decreases in the cash flows from our international operating expenses resulting from these foreign currency exchange rate movements. To further reduce our exposure to foreign currency exchange rate fluctuations on our international product sales, we enter into foreign currency forward and option contracts to hedge a portion of our projected international product sales, primarily over a three-year time horizon, with, at any given point in time, a higher percentage of nearer-term projected product sales being hedged than in successive periods.

As of June 30, 2016, and December 31, 2015, we had open foreign currency forward contracts with notional amounts of $3.5 billion and $3.3 billion, respectively, and open foreign currency option contracts with notional amounts of $225 million. We have designated these foreign currency forward and foreign currency option contracts, which are primarily euro based, as cash flow hedges, and accordingly, we report the effective portions of the unrealized gains and losses on these contracts in AOCI on the Condensed Consolidated Balance Sheets, and we reclassify them to earnings in the same periods during which the hedged transactions affect earnings.

To hedge our exposure to foreign currency exchange rate risk associated with certain of our long-term debt denominated in foreign currencies, we entered into cross-currency swap contracts. Under the terms of these contracts, we paid euros, pounds sterling and Swiss francs and received U.S. dollars for the notional amounts at the inception of the contracts, and based on these notional amounts, we exchange interest payments at fixed rates over the lives of the contracts by paying U.S. dollars and receiving euros, pounds sterling and Swiss francs. In addition, we will pay U.S. dollars to and receive euros, pounds sterling and Swiss francs from the counterparties at the maturities of the contracts for these same notional amounts. The terms of these contracts correspond to the related hedged debt, effectively converting the interest payments and principal repayment on the debt from euros, pounds sterling and Swiss francs to U.S. dollars. We have designated these cross-currency swap contracts as cash flow hedges, and accordingly, the effective portions of the unrealized gains and losses on these contracts are reported in AOCI on the Condensed Consolidated Balance Sheets and reclassified to earnings in the same periods during which the hedged debt affects earnings.

The notional amounts and interest rates of our cross-currency swaps are as follows (notional amounts in millions):

	Foreign currency				U.S. dollars
Hedged notes	Notional amount		Interest rate		Notional amount		Interest rate
2.125% 2019 euro Notes	€	675	2.125	%	$	864	2.6	%
1.25% 2022 euro Notes	€	1,250	1.25	%	$	1,388	3.2	%
0.41% 2023 Swiss franc Bonds	CHF	700	0.41	%	$	704	3.4	%
2.00% 2026 euro Notes	€	750	2.00	%	$	833	3.9	%
5.50% 2026 pound sterling Notes	£	475	5.50	%	$	747	6.0	%
4.00% 2029 pound sterling Notes	£	700	4.00	%	$	1,111	4.5	%

In connection with anticipated issuances of long-term fixed-rate debt, we entered into an aggregate notional amount of $500 million in forward interest rate contracts during the three months ended June 30, 2016. The forward interest rate contracts hedge the variability in cash flows due to changes in the applicable Treasury rate between the time we entered into these contracts and the time the related debt is issued. Gains and losses on such contracts, which are designated as cash flow hedges, are reported in AOCI and will be amortized into earnings over the lives of the associated debt issuances.

The effective portions of the unrealized gain/(loss) recognized in other comprehensive income for our derivative instruments designated as cash flow hedges were as follows (in millions):

	Three months ended						Six months ended
	June 30,						June 30,
Derivatives in cash flow hedging relationships	2016			2015			2016			2015
Foreign currency contracts	$	86		$	(99	)	$	(62	)	$	293
Cross-currency swap contracts	(226		)	143			(195		)	(81		)
Forward interest rate contracts	(4		)	—			(4		)	—
Total	$	(144	)	$	44		$	(261	)	$	212

The locations in the Condensed Consolidated Statements of Income and the effective portions of the gain/(loss) reclassified out of AOCI and into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions):

		Three months ended						Six months ended
		June 30,						June 30,
Derivatives in cash flow hedging relationships	Statements of Income location	2016			2015			2016			2015
Foreign currency contracts	Product sales	$	79		$	91		$	175		$	160
Cross-currency swap contracts	Interest and other income, net	(212		)	136			(142		)	(47		)
Forward interest rate contracts	Interest expense, net	—			(1		)	—			(1		)
Total		$	(133	)	$	226		$	33		$	112

No portions of our cash flow hedge contracts are excluded from the assessment of hedge effectiveness, and the gains and losses of the ineffective portions of these hedging instruments were not material for the three and six months endedJune 30, 2016 and 2015. As of June 30, 2016, the amounts expected to be reclassified out of AOCI and into earnings over the next 12 months are approximately $124 million of net gains on our foreign currency and cross-currency swap contracts and approximately $1 million of losses on forward interest rate contracts.

Fair value hedges

To achieve a desired mix of fixed and floating interest rates on our long-term debt, we entered into interest rate swap contracts that qualify and are designated as fair value hedges. The terms of these interest rate swap contracts correspond to the related hedged debt instruments and effectively convert a fixed interest rate coupon to a floating LIBOR-based coupon over the lives of the respective notes. We had interest rate swap agreements as of June 30, 2016, and December 31, 2015, with aggregate notional amounts of $6.65 billion. The contracts have rates that range from three-month LIBOR plus 0.4% to three-month LIBOR plus 2.0%.

For derivative instruments that qualify for and are designated as fair value hedges, we recognize in current earnings the unrealized gain or loss on the derivative resulting from the change in fair value during the period as well as the offsetting unrealized loss or gain of the hedged item resulting from the change in fair value during the period attributable to the hedged risk. For the three and six months endedJune 30, 2016, we included the unrealized losses on hedged debt of $49 million and $198 million, respectively, in the same line item, Interest expense, net, in the Condensed Consolidated Statements of Income, as the offsetting unrealized gains of $49 million and $198 million, respectively, on the related interest rate swap agreements. For the three and six months ended June 30, 2015, we included the unrealized gains on the hedged debt of $83 million and losses of $6 million, respectively, in the same line item, Interest expense, net, in the Condensed Consolidated Statements of Income, as the offsetting unrealized losses of $83 million and gains of $6 million, respectively, on the related interest rate swap agreements.

Derivatives not designated as hedges

To reduce our exposure to foreign currency fluctuations of certain assets and liabilities denominated in foreign currencies, we enter into foreign currency forward contracts that are not designated as hedging transactions. The exposures are hedged on a month-to-month basis. As of June 30, 2016, and December 31, 2015, the total notional amounts of these foreign currency forward contracts were $727 million and $911 million, respectively.

The location in the Condensed Consolidated Statements of Income and the amount of gain/(loss) recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions):

		Three months ended					Six months ended
		June 30,					June 30,
Derivatives not designated as hedging instruments	Statements of Income location	2016			2015		2016			2015
Foreign currency contracts	Interest and other income, net	$	(24	)	$	20	$	(34	)	$	(9	)

The fair values of derivatives included on the Condensed Consolidated Balance Sheets were as follows (in millions):

	Derivative assets			Derivative liabilities
June 30, 2016	Balance Sheet location	Fair value		Balance Sheet location	Fair value
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other noncurrent assets	$	68	Accrued liabilities/ Other noncurrent liabilities	$	26
Cross-currency swap contracts	Other current assets/ Other noncurrent assets	17		Accrued liabilities/ Other noncurrent liabilities	456
Forward interest rate contracts	Other current assets/ Other noncurrent assets	—		Accrued liabilities/ Other noncurrent liabilities	4
Interest rate swap contracts	Other current assets/ Other noncurrent assets	266		Accrued liabilities/ Other noncurrent liabilities	—
Total derivatives designated as hedging instruments		351			486
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	—		Accrued liabilities	1
Total derivatives not designated as hedging instruments		—			1
Total derivatives		$	351		$	487

	Derivative assets			Derivative liabilities
December 31, 2015	Balance Sheet location	Fair value		Balance Sheet location	Fair value
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other noncurrent assets	$	142	Accrued liabilities/ Other noncurrent liabilities	$	7
Cross-currency swap contracts	Other current assets/ Other noncurrent assets	—		Accrued liabilities/ Other noncurrent liabilities	250
Interest rate swap contracts	Other current assets/ Other noncurrent assets	71		Accrued liabilities/ Other noncurrent liabilities	3
Total derivatives designated as hedging instruments		213			260
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	—		Accrued liabilities	1
Total derivatives not designated as hedging instruments		—			1
Total derivatives		$	213		$	261

Our derivative contracts that were in liability positions as of June 30, 2016, contain certain credit-risk-related contingent provisions that would be triggered if (i) we were to undergo a change in control and (ii) our or the surviving entity’s creditworthiness deteriorates, which is generally defined as having either a credit rating that is below investment grade or a materially weaker creditworthiness after the change in control. If these events were to occur, the counterparties would have the right, but not the obligation, to close the contracts under early-termination provisions. In such circumstances, the counterparties could request immediate settlement of these contracts for amounts that approximate the then current fair values of the contracts. In addition, our derivative contracts are not subject to any type of master netting arrangement, and amounts due to or from a counterparty under these contracts may only be offset against other amounts due to or from the same counterparty if an event of default or termination, as defined, were to occur.

The cash flow effects of our derivative contracts for the six months ended June 30, 2016 and 2015, are included within Net cash provided by operating activities in the Condensed Consolidated Statements of Cash Flows.

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Contingencies and commitments

6 Months Ended

Jun. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Contingencies and commitments

Contingencies and commitments

Contingencies

In the ordinary course of business, we are involved in various legal proceedings and other matters that are complex in nature and have outcomes that are difficult to predict. We describe our legal proceedings and other matters that are significant or that we believe could be significant in this Note, in Note 18, Contingencies and commitments to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015, and in Note 13, Contingencies and commitments to our condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2016.

We record accruals for loss contingencies to the extent that we conclude it is probable that a liability has been incurred and the amount of the related loss can be reasonably estimated. We evaluate, on a quarterly basis, developments in legal proceedings and other matters that could cause an increase or decrease in the amount of the liability that has been accrued previously.

Our legal proceedings range from cases brought by a single plaintiff to class actions with thousands of putative class members. These legal proceedings, as well as other matters, involve various aspects of our business and a variety of claims—including but not limited to patent infringement, marketing, pricing and trade practices and securities law—some of which present novel factual allegations and/or unique legal theories.In each of the matters described in this filing or in Note 18, Contingencies and commitments to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015, or in Note 13, Contingencies and commitments to our condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2016, plaintiffs seek an award of a not-yet-quantified amount of damages or an amount that is not material. In addition, a number of the matters pending against us are at very early stages of the legal process (which in complex proceedings of the sort faced by us often extend for several years). As a result, none of the matters pending against us described in this filing, in Note 18, Contingencies and commitments to our consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2015, or in Note 13, Contingencies and commitments to our condensed consolidated financial statements in our Quarterly Report on Form 10-Q for the period ended March 31, 2016, have progressed sufficiently through discovery and/or development of important factual information and legal issues to enable us to estimate a range of possible loss, if any, or such amounts are not material.While it is not possible to accurately predict or determine the eventual outcomes of these matters, an adverse determination in one or more of these matters currently pending could have a material adverse effect on our consolidated results of operations, financial position or cash flows.

Certain recent developments concerning our legal proceedings and other matters are discussed below:

PCSK9 Antibody Patent Litigations

Patent Disputes in the European Region

As previously disclosed, Amgen was served with a patent revocation action in the Patent Court of the Chancery Division of the High Court of Justice of England and Wales (the UK Patent Court) by Pfizer Inc. seeking to revoke European Patent (UK) No. 2,215,124. Trial is scheduled for October 2017.

We are also involved in and expect future involvement in additional disputes regarding our proprotein convertase subtilisin/kexin type 9 (PCSK9) patents in other jurisdictions and regions, including matters we have filed in the United Kingdom (U.K.) and Germany.

Biosimilars Patent Litigations

We have filed a number of lawsuits against manufacturers of products that purport to be biosimilars of certain of our products. In each case, our complaint alleges that the manufacturer’s actions infringe certain patents we hold and/or that the manufacturer has failed to comply with certain provisions of the Biologics Price Competition and Innovation Act (BPCIA).

Sandoz Pegfilgrastim Litigation

On May 3, 2016, Sandoz Inc., Sandoz International GmbH and Sandoz GmbH (collectively Sandoz) filed a motion to dismiss this lawsuit pending in the U.S. District Court for the District of New Jersey, which stems from Sandoz’s abbreviated Biologics License Application (BLA) seeking U.S. Food and Drug Administration (FDA) authorization to market a biosimilar version of Amgen’s Neulasta^® (pegfilgrastim) product. On July 22, 2016, the court dismissed the case for lack of subject matter jurisdiction.

On May 12, 2016, Amgen filed a separate lawsuit in the U.S. District Court for the Northern District of California (the California Northern District Court) against Sandoz and Lek Pharmaceuticals d.d. for infringement of U.S. Patent Nos. 8,940,878 and 5,824,784 in accordance with the patent provisions of the BPCIA.

Sandoz Filgrastim Litigation

On July 1, 2016, the California Northern District Court held a claim construction hearing with respect to the patent infringement claim and counterclaims.

As previously disclosed, Sandoz filed a petition for certiorari seeking review of the U.S. Court of Appeals for the Federal Circuit (the Federal Circuit Court) ruling concluding that a biosimilar applicant must give 180-day advance notice of first marketing and that notice may only be given after the FDA has licensed the biosimilar product and Amgen filed a conditional cross-petition for certiorari seeking review of the Federal Circuit Court’s ruling that the only remedy available when a biosimilar applicant refuses to provide its BLA is to bring a patent infringement claim. On June 20, 2016, the U.S. Supreme Court invited the Solicitor General to file briefs expressing the views of the United States on both Sandoz’s petition and Amgen’s conditional cross-petition.

Apotex Pegfilgrastim/Filgrastim Litigation

On July 5, 2016, the Federal Circuit Court affirmed the U.S. District Court for the Southern District of Florida (the Florida Southern District Court) injunction, holding that the 180-day notice of commercial marketing is mandatory under the BPCIA and can only be given post-FDA licensure of the biosimilar product.

On June 24,2016, the Florida Southern District Court issued a further claim construction decision granting the motion for summary judgment of no literal infringement of U.S. Patent No. 8,952,138 (the ’138 Patent) filed by Apotex, Inc. and Apotex Corp. (collectively Apotex) and denying the motion with respect to no infringement under the doctrine of equivalents. On June 15, 2016, the Florida Southern District Court dismissed without prejudice all claims and counterclaims related to U.S. Patent Nos. 6,162,427 and 5,824,784 on the parties’ joint stipulation of dismissal. In a separate order that same day, the Florida Southern District Court also dismissed without prejudice all counterclaims related to unlawful monopolization in violation of the Sherman Antitrust Act on the parties’ joint stipulation of dismissal. On July 11, 2016, trial began on infringement of the ’138 Patent and Apotex’s counterclaims and defenses. At the conclusion of trial on July 18,2016, the Florida Southern District Court entered partial judgment in Amgen’s favor that the asserted claims of the ’138 patent are not invalid for anticipation, obviousness, indefiniteness or lack of written description and deferred decision on Apotex’s motion for judgment of no infringement under the doctrine of equivalents. The case was taken under submission and the parties were directed to file proposed findings of fact and conclusions of law on or before August 18, 2016.

Hospira Epoetin Alfa Litigation

On June 3, 2016, Amgen filed a notice of appeal seeking review of the U.S. District Court of Delaware’s order that Hospira, Inc. (Hospira), a subsidiary of Pfizer Inc., need not provide Amgen discovery of certain of its manufacturing processes that Hospira withheld during the BPCIA dispute resolution process. On July 8, 2016, Hospira filed a motion to dismiss the appeal and Amgen filed an opposition brief on July 18, 2016.

Onyx Litigation

As previously disclosed, the plaintiffs and the Onyx director defendants in this class action lawsuit filed a notice of settlement with the Superior Court of the State of California for the County of San Mateo for an immaterial amount. On July 26, 2016, the court preliminarily approved the settlement.

Federal Securities Litigation—In re Amgen Inc. Securities Litigation

On July 20, 2016, the parties agreed to settle this securities class action case for an immaterial amount. The settlement remains subject to court approval.

ERISA Litigation

On June 27, 2016, the parties reached an agreement in principle to settle this case for an immaterial amount. The settlement remains subject to court approval.

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Summary of significant accounting policies (Policies)

6 Months Ended

Jun. 30, 2016

Accounting Policies [Abstract]

Business

Business

Amgen Inc. (including its subsidiaries, referred to as “Amgen,” “the Company,” “we,” “our” or “us”) is a global biotechnology pioneer that discovers, develops, manufactures and delivers innovative human therapeutics. We operate in one business segment: human therapeutics.

Basis of presentation

Basis of presentation

The financial information for the three and six months endedJune 30, 2016 and 2015, is unaudited but includes all adjustments (consisting of only normal recurring adjustments unless otherwise indicated), which Amgen considers necessary for a fair presentation of its condensed consolidated results of operations for those periods. Interim results are not necessarily indicative of results for the full fiscal year.

The condensed consolidated financial statements should be read in conjunction with our consolidated financial statements and the notes thereto contained in our Annual Report on Form 10-K for the year ended December 31, 2015, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Report on Form 10-Q for the period ended March 31, 2016.

Principles of consolidation

Principles of consolidation

The condensed consolidated financial statements include the accounts of Amgen as well as its majority-owned subsidiaries. We do not have any significant interests in anyvariable interest entities. All material intercompany transactions and balances have been eliminated in consolidation.

Use of estimates

Use of estimates

The preparation of condensed consolidated financial statements in conformity with accounting principles generally accepted in the United States (GAAP) requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Actual results may differ from those estimates.

Property, plant and equipment, net

Property, plant and equipment, net

Property, plant and equipment is recorded at historical cost, net of accumulated depreciation and amortization, of $7.5 billion and $7.3 billion as of June 30, 2016, and December 31, 2015, respectively.

Recent accounting pronouncements and reclassifications

Recent accounting pronouncements and reclassifications

During the first quarter of 2016, we adopted a new accounting standard that amends the presentation for debt issuance costs. See Note 9, Financing arrangements.

During the first quarter of 2016, we adopted a new accounting standard that amends certain aspects of the accounting for employee share-based payments. One aspect of the standard requires that excess tax benefits and deficiencies that arise upon vesting or exercise of share-based payments be recognized as income tax benefits and expenses in the income statement. See Note 4, Income taxes. Previously, such amounts were recognized as increases and decreases in common stock and additional paid-in capital. This aspect of the standard was adopted prospectively, and accordingly, the Provision for income taxes for the three and six months endedJune 30, 2016, includes $37 million and $114 million, respectively, of excess tax benefits arising from share-based payments. The new standard also amends the presentation of employee share-based payment-related items in the statement of cash flows by requiring (i) that excess income tax benefits and deficiencies be classified in cash flows from operating activities (such amounts were previously included in cash flows from financing activities) and (ii) that cash paid to taxing authorities arising from the withholding of shares from employees be classified in cash flows from financing activities (such amounts were previously included in cash flows from operating activities). We adopted the aspects of the standard affecting the cash flow presentation retrospectively, and accordingly, to conform to the current year presentation, in the Condensed Consolidated Statement of Cash Flows for the six months endedJune 30, 2015, we reclassified: (a) $233 million of excess tax benefits from Net cash used in financing activities to Net cash provided by operating activities and (b) $390 million of cash paid to taxing authorities arising from withholding of shares from employees from Net cash provided by operating activities to Net cash used in financing activities.

In May 2014, the Financial Accounting Standards Board (FASB) issued a new accounting standard that amends the guidance for the recognition of revenue from contracts with customers to transfer goods and services. The FASB has subsequently issued additional clarifying standards to address issues arising from implementation of the new revenue recognition standard. The new revenue recognition standard and clarifying standards are effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017. The revenue standards are required to be adopted by taking either a full retrospective or a modified retrospective approach. We are currently evaluating the impact that the revenue standards will have on our consolidated financial statements and determining the transition method that we will apply.

In January 2016, the FASB issued a new accounting standard that amends the accounting and disclosures of financial instruments, including a provision that requires equity investments (except for investments accounted for under the equity method of accounting) to be measured at fair value, with changes in fair value recognized in current earnings. The new standard is effective for interim and annual periods beginning on January 1, 2018. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

In February 2016, the FASB issued a new accounting standard that amends the guidance for the accounting and disclosure of leases. This new standard requires that lessees recognize the assets and liabilities that arise from leases on the balance sheet and disclose qualitative and quantitative information about their leasing arrangements. The new standard is effective for interim and annual periods beginning on January 1, 2019. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

In June 2016, the FASB issued a new accounting standard that amends the guidance for measuring and recording credit losses on financial assets measured at amortized cost by replacing the “incurred loss” model with an “expected loss” model. Accordingly, these financial assets are presented at the net amount expected to be collected. This new standard also requires that credit losses related to available-for-sale debt securities be recorded through an allowance for such losses rather than reducing the carrying amount under the current other-than-temporary-impairment model. The new standard is effective for interim and annual periods beginning on January 1, 2020. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.

Certain amounts in the Condensed Consolidated Statement of Cash Flows for the six months endedJune 30, 2015, have been reclassified from Accounts payable to Other liabilities within Changes in operating assets and liabilities, net of acquisitions to conform to the current year presentation.

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Business combinations (Tables)

6 Months Ended

Jun. 30, 2016

Business Combinations [Abstract]

Aggregate acquisition date consideration to acquire an entity

The aggregate acquisition date consideration to acquire Dezima consisted of (in millions):

Total cash paid to former shareholders of Dezima	$	300
Fair value of contingent consideration obligations	110
Total consideration	$	410

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Earnings per share (Tables)

6 Months Ended

Jun. 30, 2016

Earnings Per Share [Abstract]

Computation for basic and diluted earnings per share

The computations for basic and diluted EPS were as follows (in millions, except per share data):

	Three months ended				Six months ended
	June 30,				June 30,
	2016		2015		2016		2015
Income (Numerator):
Net income for basic and diluted EPS	$	1,870	$	1,653	$	3,770	$	3,276
Shares (Denominator):
Weighted-average shares for basic EPS	751		760		753		761
Effect of dilutive securities	5		8		6		8
Weighted-average shares for diluted EPS	756		768		759		769
Basic EPS	$	2.49	$	2.18	$	5.01	$	4.30
Diluted EPS	$	2.47	$	2.15	$	4.97	$	4.26

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Available-for-sale investments (Tables)

6 Months Ended

Jun. 30, 2016

Investments, Debt and Equity Securities [Abstract]

Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security

The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security were as follows (in millions):

Type of security as of June 30, 2016	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	7,916	$	104	$	—		$	8,020
Other government-related debt securities:
U.S.	345		2		—			347
Foreign and other	1,814		54		(2		)	1,866
Corporate debt securities:
Financial	8,120		121		(3		)	8,238
Industrial	8,345		141		(13		)	8,473
Other	1,002		17		(1		)	1,018
Residential mortgage-backed securities	1,729		15		(6		)	1,738
Other mortgage- and asset-backed securities	2,197		10		(27		)	2,180
Money market mutual funds	1,673		—		—			1,673
Other short-term interest-bearing securities	1,014		—		—			1,014
Total interest-bearing securities	34,155		464		(52		)	34,567
Equity securities	89		34		—			123
Total available-for-sale investments	$	34,244	$	498	$	(52	)	$	34,690

Type of security as of December 31, 2015	Amortized cost		Gross unrealized gains		Gross unrealized losses			Estimated fair value
U.S. Treasury securities	$	4,298	$	—	$	(24	)	$	4,274
Other government-related debt securities:
U.S.	536		—		(2		)	534
Foreign and other	1,768		7		(36		)	1,739
Corporate debt securities:
Financial	7,904		7		(40		)	7,871
Industrial	7,961		11		(136		)	7,836
Other	905		1		(21		)	885
Residential mortgage-backed securities	1,484		1		(15		)	1,470
Other mortgage- and asset-backed securities	2,524		—		(55		)	2,469
Money market mutual funds	3,370		—		—			3,370
Other short-term interest-bearing securities	528		—		—			528
Total interest-bearing securities	31,278		27		(329		)	30,976
Equity securities	88		48		—			136
Total available-for-sale investments	$	31,366	$	75	$	(329	)	$	31,112

Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets

The fair values of available-for-sale investments by classification in the Condensed Consolidated Balance Sheets were as follows (in millions):

Classification in the Condensed Consolidated Balance Sheets	June 30, 2016		December 31, 2015
Cash and cash equivalents	$	2,163	$	3,738
Marketable securities	32,404		27,238
Other assets — noncurrent	123		136
Total available-for-sale investments	$	34,690	$	31,112

Fair values of available-for-sale interest-bearing security investments by contractual maturity

The fair values of available-for-sale interest-bearing security investments by contractual maturity, except for mortgage- and asset-backed securities that do not have a single maturity date, were as follows (in millions):

Contractual maturity	June 30, 2016		December 31, 2015
Maturing in one year or less	$	3,965	$	4,578
Maturing after one year through three years	11,141		9,370
Maturing after three years through five years	12,155		9,932
Maturing after five years through ten years	3,335		3,087
Maturing after ten years	53		70
Mortgage- and asset-backed securities	3,918		3,939
Total interest-bearing securities	$	34,567	$	30,976

Available-for-sale securities, fair value and unrealized losses

The unrealized losses on available-for-sale investments and their related fair values were as follows (in millions):

	Less than 12 months					12 months or greater
Type of security as of June 30, 2016	Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities	$	174	$	—		$	—	$	—
Other government-related debt securities:
Foreign and other	53		(1		)	67		(1		)
Corporate debt securities:
Financial	420		(2		)	171		(1		)
Industrial	884		(8		)	405		(5		)
Other	64		—			31		(1		)
Residential mortgage-backed securities	100		(1		)	289		(5		)
Other mortgage- and asset-backed securities	168		(4		)	481		(23		)
Equity securities	1		—			—		—
Total	$	1,864	$	(16	)	$	1,444	$	(36	)

	Less than 12 months					12 months or greater
Type of security as of December 31, 2015	Fair value		Unrealized losses			Fair value		Unrealized losses
U.S. Treasury securities	$	4,196	$	(24	)	$	—	$	—
Other government-related debt securities:
U.S.	494		(2		)	20		—
Foreign and other	1,306		(32		)	56		(4		)
Corporate debt securities:
Financial	5,988		(38		)	228		(2		)
Industrial	5,427		(108		)	679		(28		)
Other	807		(19		)	39		(2		)
Residential mortgage-backed securities	804		(8		)	304		(7		)
Other mortgage- and asset-backed securities	1,834		(19		)	561		(36		)
Total	$	20,856	$	(250	)	$	1,887	$	(79	)

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Inventories (Tables)

6 Months Ended

Jun. 30, 2016

Inventory Disclosure [Abstract]

Inventories

Inventories consisted of the following (in millions):

	June 30, 2016		December 31, 2015
Raw materials	$	205	$	201
Work in process	1,510		1,529
Finished goods	956		705
Total inventories	$	2,671	$	2,435

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Goodwill and other intangible assets (Tables)

6 Months Ended

Jun. 30, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of goodwill

Changes in the carrying amounts of goodwill were as follows (in millions):

	Six months ended June 30,
	2016		2015
Beginning balance	$	14,787	$	14,788
Goodwill related to acquisitions of businesses(1)	2		—
Currency translation adjustments	10		(65		)
Ending balance	$	14,799	$	14,723

⁽¹⁾  Consists of goodwill recognized on the acquisition dates of business combinations and subsequent adjustments to these amounts resulting from changes to the acquisition date fair values of net assets acquired in the business combinations recorded during their respective measurement periods.

Schedule of identifiable intangible assets

Identifiable intangible assets consisted of the following (in millions):

	June 30, 2016							December 31, 2015
	Gross carrying amount		Accumulated amortization			Intangible assets, net		Gross carrying amount		Accumulated amortization			Intangible assets, net
Finite-lived intangible assets:
Developed product technology rights	$	12,313	$	(5,472	)	$	6,841	$	12,310	$	(4,996	)	$	7,314
Licensing rights	3,275		(1,149		)	2,126		3,275		(998		)	2,277
Research and development technology rights	1,138		(675		)	463		1,134		(635		)	499
Marketing-related rights	1,349		(726		)	623		1,186		(650		)	536
Total finite-lived intangible assets	18,075		(8,022		)	10,053		17,905		(7,279		)	10,626
Indefinite-lived intangible assets:
IPR&D	1,015		—			1,015		1,015		—			1,015
Total identifiable intangible assets	$	19,090	$	(8,022	)	$	11,068	$	18,920	$	(7,279	)	$	11,641

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Financing arrangements (Tables)

6 Months Ended

Jun. 30, 2016

Debt Disclosure [Abstract]

Principal amounts, fixed contractual coupon rates and aggregate carrying value of long-term borrowings

The principal amounts, fixed contractual coupon rates and aggregate carrying value of our long-term borrowings were as follows (in millions):

	June 30, 2016			December 31, 2015
2.30% notes due 2016 (2.30% 2016 Notes)	$	—		$	750
2.50% notes due 2016 (2.50% 2016 Notes)	1,000			1,000
2.125% notes due 2017 (2.125% 2017 Notes)	1,250			1,250
Floating Rate Notes due 2017	600			600
1.25% notes due 2017 (1.25% 2017 Notes)	850			850
5.85% notes due 2017 (5.85% 2017 Notes)	1,100			1,100
6.15% notes due 2018 (6.15% 2018 Notes)	500			500
Term Loan due 2018 (Term Loan)	1,725			1,975
4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes)	606			599
5.70% notes due 2019 (5.70% 2019 Notes)	1,000			1,000
Floating Rate Notes due 2019	250			250
2.20% notes due 2019 (2.20% 2019 Notes)	1,400			1,400
2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes)	750			733
4.50% notes due 2020 (4.50% 2020 Notes)	300			300
2.125% notes due 2020 (2.125% 2020 Notes)	750			750
3.45% notes due 2020 (3.45% 2020 Notes)	900			900
4.10% notes due 2021 (4.10% 2021 Notes)	1,000			1,000
3.875% notes due 2021 (3.875% 2021 Notes)	1,750			1,750
1.25% euro-denominated notes due 2022 (1.25% 2022 euro Notes)	1,388			—
2.70% notes due 2022 (2.70% 2022 Notes)	500			500
3.625% notes due 2022 (3.625% 2022 Notes)	750			750
0.41% Swiss-franc-denominated bonds due 2023 (0.41% 2023 Swiss franc Bonds)	717			—
3.625% notes due 2024 (3.625% 2024 Notes)	1,400			1,400
3.125% notes due 2025 (3.125% 2025 Notes)	1,000			1,000
2.00% euro-denominated notes due 2026 (2.00% 2026 euro Notes)	833			—
5.50% pound-sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes)	633			700
4.00% pound-sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes)	932			1,032
6.375% notes due 2037 (6.375% 2037 Notes)	552			900
6.90% notes due 2038 (6.90% 2038 Notes)	291			500
6.40% notes due 2039 (6.40% 2039 Notes)	466			1,000
5.75% notes due 2040 (5.75% 2040 Notes)	412			700
4.95% notes due 2041 (4.95% 2041 Notes)	600			600
5.15% notes due 2041 (5.15% 2041 Notes)	974			2,250
5.65% notes due 2042 (5.65% 2042 Notes)	487			1,250
5.375% notes due 2043 (5.375% 2043 Notes)	261			1,000
4.40% notes due 2045 (4.40% 2045 Notes)	1,250			1,250
4.563% notes due 2048 (4.563% 2048 Notes)	1,415			—
4.663% notes due 2051 (4.663% 2051 Notes)	3,541			—
Other notes	100			100
Unamortized bond discounts and issuance costs	(1,011		)	(210		)
Total carrying value of debt	$	33,222		$	31,429
Less current portion	(5,294		)	(2,247		)
Total noncurrent debt	$	27,928		$	29,182

Principal amounts of Old Notes tendered and subsequently canceled

The following principal amounts of each series of Old Notes were validly tendered and subsequently canceled (in millions):

	Principal Amount Exchanged
6.375% 2037 Notes	$	348
6.90% 2038 Notes	209
6.40% 2039 Notes	534
5.75% 2040 Notes	288
5.15% 2041 Notes	1,276
5.65% 2042 Notes	763
5.375% 2043 Notes	739

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Stockholders' equity (Tables)

6 Months Ended

Jun. 30, 2016

Equity [Abstract]

Share repurchase program activity

Activity under our stock repurchase program, on a trade date basis, was as follows (in millions):

	2016			2015
	Shares	Dollars		Shares	Dollars
First quarter	4.7	$	690	2.9	$	451
Second quarter	3.9	591		3.3	515
	8.6	$	1,281	6.2	$	966

Components of accumulated other comprehensive income

The components of accumulated other comprehensive income/(loss) (AOCI) were as follows (in millions):

	Foreign currency translation			Cash flow hedges			Available-for-sale securities			Other			AOCI
Balance as of December 31, 2015	$	(511	)	$	297		$	(260	)	$	(6	)	$	(480	)
Foreign currency translation adjustments	36			—			—			—			36
Unrealized (losses) gains	—			(117		)	379			—			262
Reclassification adjustments to income	—			(166		)	30			—			(136		)
Income taxes	(3		)	104			(51		)	—			50
Balance as of March 31, 2016	$	(478	)	$	118		$	98		$	(6	)	$	(268	)
Foreign currency translation adjustments	(22		)	—			—			—			(22		)
Unrealized (losses) gains	—			(144		)	268			—			124
Reclassification adjustments to income	—			133			23			—			156
Other	—			—			—			1			1
Income taxes	5			5			(107		)	—			(97		)
Balance as of June 30, 2016	$	(495	)	$	112		$	282		$	(5	)	$	(106	)

Reclassifications out of accumulated other comprehensive income

The reclassifications out of AOCI and into earnings were as follows (in millions):

	Amounts reclassified out of AOCI
Components of AOCI	Three months ended June 30, 2016			Three months ended June 30, 2015			Line item affected in the  Statements of Income
Cash flow hedges:
Foreign currency contract gains	$	79		$	91		Product sales
Cross-currency swap contract (losses) gains	(212		)	136			Interest and other income, net
Forward interest rate contract losses	—			(1		)	Interest expense, net
	(133		)	226			Total before income tax
	49			(81		)	Tax benefit (expense)
	$	(84	)	$	145		Net of taxes
Available-for-sale securities:
Net realized losses	$	(23	)	$	(9	)	Interest and other income, net
	8			3			Tax benefit
	$	(15	)	$	(6	)	Net of taxes

	Amounts reclassified out of AOCI
Components of AOCI	Six months ended June 30, 2016			Six months ended June 30, 2015			Line item affected in the  Statements of Income
Cash flow hedges:
Foreign currency contract gains	$	175		$	160		Product sales
Cross-currency swap contract losses	(142		)	(47		)	Interest and other income, net
Forward interest rate contract losses	—			(1		)	Interest expense, net
	33			112			Total before income tax
	(12		)	(40		)	Tax expense
	$	21		$	72		Net of taxes
Available-for-sale securities:
Net realized losses	$	(53	)	$	(44	)	Interest and other income, net
	8			16			Tax benefit
	$	(45	)	$	(28	)	Net of taxes

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Fair value measurement (Tables)

6 Months Ended

Jun. 30, 2016

Fair Value Disclosures [Abstract]

Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis

The fair value of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis was as follows (in millions):

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Fair value measurement
as of June 30, 2016, using:							Total
Assets:
Available-for-sale investments:
U.S. Treasury securities	$	8,020	$	—	$	—	$	8,020
Other government-related debt securities:
U.S.	—		347		—		347
Foreign and other	—		1,866		—		1,866
Corporate debt securities:
Financial	—		8,238		—		8,238
Industrial	—		8,473		—		8,473
Other	—		1,018		—		1,018
Residential mortgage-backed securities	—		1,738		—		1,738
Other mortgage- and asset-backed securities	—		2,180		—		2,180
Money market mutual funds	1,673		—		—		1,673
Other short-term interest-bearing securities	—		1,014		—		1,014
Equity securities	123		—		—		123
Derivatives:
Foreign currency contracts	—		68		—		68
Cross-currency swap contracts	—		17		—		17
Interest rate swap contracts	—		266		—		266
Total assets	$	9,816	$	25,225	$	—	$	35,041
Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	27	$	—	$	27
Cross-currency swap contracts	—		456		—		456
Forward interest rate contracts	—		4		—		4
Contingent consideration obligations in connection with business combinations	—		—		171		171
Total liabilities	$	—	$	487	$	171	$	658

	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Fair value measurement
as of December 31, 2015, using:							Total
Assets:
Available-for-sale investments:
U.S. Treasury securities	$	4,274	$	—	$	—	$	4,274
Other government-related debt securities:
U.S.	—		534		—		534
Foreign and other	—		1,739		—		1,739
Corporate debt securities:
Financial	—		7,871		—		7,871
Industrial	—		7,836		—		7,836
Other	—		885		—		885
Residential mortgage-backed securities	—		1,470		—		1,470
Other mortgage- and asset-backed securities	—		2,469		—		2,469
Money market mutual funds	3,370		—		—		3,370
Other short-term interest-bearing securities	—		528		—		528
Equity securities	136		—		—		136
Derivatives:
Foreign currency contracts	—		142		—		142
Interest rate swap contracts	—		71		—		71
Total assets	$	7,780	$	23,545	$	—	$	31,325
Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	8	$	—	$	8
Cross-currency swap contracts	—		250		—		250
Interest rate swap contracts	—		3		—		3
Contingent consideration obligations in connection with business combinations	—		—		188		188
Total liabilities	$	—	$	261	$	188	$	449

Changes in carrying amounts of contingent consideration obligations

Changes in the carrying amounts of contingent consideration obligations were as follows (in millions):

	Three months ended June 30,					Six months ended June 30,
	2016			2015		2016			2015
Beginning balance	$	194		$	215	$	188		$	215
Net changes in valuation	(23		)	—		(17		)	—
Ending balance	$	171		$	215	$	171		$	215

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Derivative instruments (Tables)

6 Months Ended

Jun. 30, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional amounts and interest rates for cross-currency swaps

The notional amounts and interest rates of our cross-currency swaps are as follows (notional amounts in millions):

	Foreign currency				U.S. dollars
Hedged notes	Notional amount		Interest rate		Notional amount		Interest rate
2.125% 2019 euro Notes	€	675	2.125	%	$	864	2.6	%
1.25% 2022 euro Notes	€	1,250	1.25	%	$	1,388	3.2	%
0.41% 2023 Swiss franc Bonds	CHF	700	0.41	%	$	704	3.4	%
2.00% 2026 euro Notes	€	750	2.00	%	$	833	3.9	%
5.50% 2026 pound sterling Notes	£	475	5.50	%	$	747	6.0	%
4.00% 2029 pound sterling Notes	£	700	4.00	%	$	1,111	4.5	%

Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges

The effective portions of the unrealized gain/(loss) recognized in other comprehensive income for our derivative instruments designated as cash flow hedges were as follows (in millions):

	Three months ended						Six months ended
	June 30,						June 30,
Derivatives in cash flow hedging relationships	2016			2015			2016			2015
Foreign currency contracts	$	86		$	(99	)	$	(62	)	$	293
Cross-currency swap contracts	(226		)	143			(195		)	(81		)
Forward interest rate contracts	(4		)	—			(4		)	—
Total	$	(144	)	$	44		$	(261	)	$	212

Location in the Condensed Consolidated Statements of Income and the effective portion of gain (loss) reclassified from Accumulated Other Comprehensive Income into earnings for our derivative instruments designated as cash flow hedges

The locations in the Condensed Consolidated Statements of Income and the effective portions of the gain/(loss) reclassified out of AOCI and into earnings for our derivative instruments designated as cash flow hedges were as follows (in millions):

		Three months ended						Six months ended
		June 30,						June 30,
Derivatives in cash flow hedging relationships	Statements of Income location	2016			2015			2016			2015
Foreign currency contracts	Product sales	$	79		$	91		$	175		$	160
Cross-currency swap contracts	Interest and other income, net	(212		)	136			(142		)	(47		)
Forward interest rate contracts	Interest expense, net	—			(1		)	—			(1		)
Total		$	(133	)	$	226		$	33		$	112

Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for the derivative instruments not designated as hedging instruments

The location in the Condensed Consolidated Statements of Income and the amount of gain/(loss) recognized in earnings for our derivative instruments not designated as hedging instruments were as follows (in millions):

		Three months ended					Six months ended
		June 30,					June 30,
Derivatives not designated as hedging instruments	Statements of Income location	2016			2015		2016			2015
Foreign currency contracts	Interest and other income, net	$	(24	)	$	20	$	(34	)	$	(9	)

Fair values of derivatives included in the Condensed Consolidated Balance Sheets

The fair values of derivatives included on the Condensed Consolidated Balance Sheets were as follows (in millions):

	Derivative assets			Derivative liabilities
June 30, 2016	Balance Sheet location	Fair value		Balance Sheet location	Fair value
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other noncurrent assets	$	68	Accrued liabilities/ Other noncurrent liabilities	$	26
Cross-currency swap contracts	Other current assets/ Other noncurrent assets	17		Accrued liabilities/ Other noncurrent liabilities	456
Forward interest rate contracts	Other current assets/ Other noncurrent assets	—		Accrued liabilities/ Other noncurrent liabilities	4
Interest rate swap contracts	Other current assets/ Other noncurrent assets	266		Accrued liabilities/ Other noncurrent liabilities	—
Total derivatives designated as hedging instruments		351			486
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	—		Accrued liabilities	1
Total derivatives not designated as hedging instruments		—			1
Total derivatives		$	351		$	487

	Derivative assets			Derivative liabilities
December 31, 2015	Balance Sheet location	Fair value		Balance Sheet location	Fair value
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other noncurrent assets	$	142	Accrued liabilities/ Other noncurrent liabilities	$	7
Cross-currency swap contracts	Other current assets/ Other noncurrent assets	—		Accrued liabilities/ Other noncurrent liabilities	250
Interest rate swap contracts	Other current assets/ Other noncurrent assets	71		Accrued liabilities/ Other noncurrent liabilities	3
Total derivatives designated as hedging instruments		213			260
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	—		Accrued liabilities	1
Total derivatives not designated as hedging instruments		—			1
Total derivatives		$	213		$	261

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Summary of significant accounting policies (Details) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2016 USD ($) segment	Jun. 30, 2015 USD ($)	Dec. 31, 2015 USD ($)
Accounting Policies [Abstract]
Number of operating segments | segment		1
Accumulated depreciation and amortization on property, plant and equipment	$ 7,500	$ 7,500		$ 7,300
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Excess tax benefits from share-based payments	$ 37	114
Change in net cash provided by operating activities		4,592	$ 4,766
Change in net cash used in financing activities		$ (1,059)	(1,391)
ASU 2016-09, Excess Tax Benefit [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Change in net cash provided by operating activities			233
Change in net cash used in financing activities			(233)
ASU 2016-09, Withholding Taxes on Shares Withheld [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Change in net cash provided by operating activities			390
Change in net cash used in financing activities			$ (390)

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Restructuring (Details) $ in Millions	Jun. 30, 2016 USD ($)
Restructuring Cost and Reserve [Line Items]
Restructuring liability	$ 35
Separation and Other Headcount-related Costs [Member]
Restructuring Cost and Reserve [Line Items]
Total costs incurred to date	471
Asset-related Charges [Member]
Restructuring Cost and Reserve [Line Items]
Total costs incurred to date	213
Minimum [Member]
Restructuring Cost and Reserve [Line Items]
Expected pre-tax accounting charges	800
Separation and other headcount-related costs	535
Accelerated depreciation and asset impairment and other related charges	265
Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Expected pre-tax accounting charges	900
Separation and other headcount-related costs	585
Accelerated depreciation and asset impairment and other related charges	$ 315

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Business combinations (Aggregate Consideration Paid - Dezima) (Details) - Dezima [Member] $ in Millions	Oct. 14, 2015 USD ($)
Business Acquisition [Line Items]
Total cash paid to former shareholders of Dezima	$ 300
Fair value of contingent consideration obligations	110
Total consideration	$ 410

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Business combinations (Details Textual) - USD ($)	Oct. 14, 2015	Jun. 30, 2016	Dec. 31, 2015	Oct. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Business Acquisition [Line Items]
Goodwill		$ 14,799,000,000	$ 14,787,000,000		$ 14,723,000,000	$ 14,788,000,000
Dezima [Member]
Business Acquisition [Line Items]
Maximum additional consideration due contingent on certain milestones	$ 1,250,000,000.00			$ 1,250,000,000.00
Estimated fair values of contingent consideration obligations	110,000,000
Indefinite-lived intangible assets - IPR&D	400,000,000
Goodwill	108,000,000
Deferred tax liabilities	$ 100,000,000

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Income taxes (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income Tax Disclosure [Abstract]
Effective income tax rate	15.20%	17.20%	15.50%	15.40%
Increase in gross amount of unrecognized tax benefits for period	$ 110		$ 220
Puerto Rico Excise Tax [Member]
Puerto Rico Excise Tax Rate [Line Items]
Excise tax rate effective through December 31, 2017			4.00%

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Earnings per share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Income (Numerator):
Net income for basic and diluted EPS	$ 1,870	$ 1,653	$ 3,770	$ 3,276
Shares (Denominator):
Weighted-average shares for basic EPS	751	760	753	761
Effect of dilutive securities	5	8	6	8
Weighted-average shares for diluted EPS	756	768	759	769
Basic EPS (in usd per share)	$ 2.49	$ 2.18	$ 5.01	$ 4.30
Diluted EPS (in usd per share)	$ 2.47	$ 2.15	$ 4.97	$ 4.26

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Available-for-sale investments (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	$ 34,244	$ 31,366
Gross unrealized gains	498	75
Gross unrealized losses	(52)	(329)
Estimated fair value	34,690	31,112
U.S. Treasury securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	7,916	4,298
Gross unrealized gains	104	0
Gross unrealized losses	0	(24)
Estimated fair value	8,020	4,274
Other government-related debt securities - U.S. [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	345	536
Gross unrealized gains	2	0
Gross unrealized losses	0	(2)
Estimated fair value	347	534
Other government-related debt securities - Foreign and other [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	1,814	1,768
Gross unrealized gains	54	7
Gross unrealized losses	(2)	(36)
Estimated fair value	1,866	1,739
Corporate debt securities - Financial [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	8,120	7,904
Gross unrealized gains	121	7
Gross unrealized losses	(3)	(40)
Estimated fair value	8,238	7,871
Corporate debt securities - Industrial [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	8,345	7,961
Gross unrealized gains	141	11
Gross unrealized losses	(13)	(136)
Estimated fair value	8,473	7,836
Corporate debt securities - Other [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	1,002	905
Gross unrealized gains	17	1
Gross unrealized losses	(1)	(21)
Estimated fair value	1,018	885
Residential mortgage-backed securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	1,729	1,484
Gross unrealized gains	15	1
Gross unrealized losses	(6)	(15)
Estimated fair value	1,738	1,470
Other mortgage- and asset-backed securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	2,197	2,524
Gross unrealized gains	10	0
Gross unrealized losses	(27)	(55)
Estimated fair value	2,180	2,469
Money market mutual funds [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	1,673	3,370
Gross unrealized gains	0	0
Gross unrealized losses	0	0
Estimated fair value	1,673	3,370
Other short-term interest-bearing securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	1,014	528
Gross unrealized gains	0	0
Gross unrealized losses	0	0
Estimated fair value	1,014	528
Total interest-bearing securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	34,155	31,278
Gross unrealized gains	464	27
Gross unrealized losses	(52)	(329)
Estimated fair value	34,567	30,976
Equity securities [Member]
Amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of available-for-sale investments by type of security
Amortized cost	89	88
Gross unrealized gains	34	48
Gross unrealized losses	0	0
Estimated fair value	$ 123	$ 136

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Available-for-sale investments (Fair Values by Classification) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015	Jun. 30, 2015	Dec. 31, 2014
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets
Cash and cash equivalents	$ 2,630	$ 4,144	$ 3,795	$ 3,731
Marketable securities	32,404	27,238
Other assets — noncurrent	1,773	1,599
Total available-for-sale investments	34,690	31,112
Available-for-sale investments [Member]
Fair values of available-for-sale investments by classification in the Consolidated Balance Sheets
Cash and cash equivalents	2,163	3,738
Other assets — noncurrent	$ 123	$ 136

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Available-for-sale investments (Fair Values by Contractual Maturity) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Fair values of available-for-sale debt security investments by contractual maturity
Maturing in one year or less	$ 3,965	$ 4,578
Maturing after one year through three years	11,141	9,370
Maturing after three years through five years	12,155	9,932
Maturing after five years through ten years	3,335	3,087
Maturing after ten years	53	70
Mortgage- and asset-backed securities	3,918	3,939
Total available-for-sale investments	34,690	31,112
Total interest-bearing securities [Member]
Fair values of available-for-sale debt security investments by contractual maturity
Total available-for-sale investments	$ 34,567	$ 30,976

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Available-for-sale investments (Unrealized Losses and Fair Values) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	$ 1,864	$ 20,856
Less than 12 months, Unrealized losses	(16)	(250)
12 months or greater, Fair value	1,444	1,887
12 months or greater, Unrealized losses	(36)	(79)
U.S. Treasury securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	174	4,196
Less than 12 months, Unrealized losses	0	(24)
12 months or greater, Fair value	0	0
12 months or greater, Unrealized losses	0	0
Other government-related debt securities - U.S. [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value		494
Less than 12 months, Unrealized losses		(2)
12 months or greater, Fair value		20
12 months or greater, Unrealized losses		0
Other government-related debt securities - Foreign and other [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	53	1,306
Less than 12 months, Unrealized losses	(1)	(32)
12 months or greater, Fair value	67	56
12 months or greater, Unrealized losses	(1)	(4)
Corporate debt securities - Financial [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	420	5,988
Less than 12 months, Unrealized losses	(2)	(38)
12 months or greater, Fair value	171	228
12 months or greater, Unrealized losses	(1)	(2)
Corporate debt securities - Industrial [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	884	5,427
Less than 12 months, Unrealized losses	(8)	(108)
12 months or greater, Fair value	405	679
12 months or greater, Unrealized losses	(5)	(28)
Corporate debt securities - Other [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	64	807
Less than 12 months, Unrealized losses	0	(19)
12 months or greater, Fair value	31	39
12 months or greater, Unrealized losses	(1)	(2)
Residential mortgage-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	100	804
Less than 12 months, Unrealized losses	(1)	(8)
12 months or greater, Fair value	289	304
12 months or greater, Unrealized losses	(5)	(7)
Other mortgage- and asset-backed securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	168	1,834
Less than 12 months, Unrealized losses	(4)	(19)
12 months or greater, Fair value	481	561
12 months or greater, Unrealized losses	(23)	$ (36)
Equity securities [Member]
Schedule of Available-for-sale Securities [Line Items]
Less than 12 months, Fair value	1
Less than 12 months, Unrealized losses	0
12 months or greater, Fair value	0
12 months or greater, Unrealized losses	$ 0

XML

Available-for-sale investments (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Investments [Line Items]
Total realized gains	$ 31	$ 18	$ 68	$ 54
Total realized losses	54	$ 27	121	$ 98
Available-for-sale investments [Member]
Investments [Line Items]
Cash and cash equivalents	$ 467		$ 467		$ 406

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Inventories (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Inventories
Raw materials	$ 205	$ 201
Work in process	1,510	1,529
Finished goods	956	705
Total inventories	$ 2,671	$ 2,435

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Goodwill and other intangible assets (Goodwill Roll Forward) (Details) - USD ($) $ in Millions		6 Months Ended
		Jun. 30, 2016	Jun. 30, 2015
Goodwill [Roll Forward]
Beginning balance		$ 14,787	$ 14,788
Goodwill related to acquisitions of businesses	[1]	2	0
Currency translation adjustments		10	(65)
Ending balance		$ 14,799	$ 14,723

[1] Consists of goodwill recognized on the acquisition dates of business combinations and subsequent adjustments to these amounts resulting from changes to the acquisition date fair values of net assets acquired in the business combinations recorded during their respective measurement periods.

XML

Goodwill and other intangible assets (Idenfitiable Intangible Assets) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Gross carrying amount	$ 19,090	$ 18,920
Accumulated amortization	(8,022)	(7,279)
Intangible assets, net	11,068	11,641
Finite-lived intangible assets:
Gross carrying amount	18,075	17,905
Accumulated amortization	(8,022)	(7,279)
Intangible assets, net	10,053	10,626
IPR&D [Member]
Indefinite-lived intangible assets:
Indefinite-lived intangible assets	1,015	1,015
Developed Product Technology Rights [Member]
Finite-lived intangible assets:
Gross carrying amount	12,313	12,310
Accumulated amortization	(5,472)	(4,996)
Intangible assets, net	6,841	7,314
Licensing Rights [Member]
Finite-lived intangible assets:
Gross carrying amount	3,275	3,275
Accumulated amortization	(1,149)	(998)
Intangible assets, net	2,126	2,277
Research and Development Technology Rights [Member]
Finite-lived intangible assets:
Gross carrying amount	1,138	1,134
Accumulated amortization	(675)	(635)
Intangible assets, net	463	499
Marketing-related Rights [Member]
Finite-lived intangible assets:
Gross carrying amount	1,349	1,186
Accumulated amortization	(726)	(650)
Intangible assets, net	$ 623	$ 536

XML

Goodwill and other intangible assets (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization charges associated with finite-lived intangible assets	$ 371	$ 345	$ 740	$ 686
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
Total estimated amortization of finite-lived intangible assets for the six months ending December 31, 2016	700		700
Total estimated amortization of finite-lived intangible assets for 2017	1,300		1,300
Total estimated amortization of finite-lived intangible assets for 2018	1,200		1,200
Total estimated amortization of finite-lived intangible assets for 2019	1,100		1,100
Total estimated amortization of finite-lived intangible assets for 2020	1,000		1,000
Total estimated amortization of finite-lived intangible assets for 2021	$ 900		$ 900

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Financing arrangements (Principal Amounts and Carrying Value of Long-term Borrowings) (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Feb. 29, 2016	Dec. 31, 2015
Debt Instrument [Line Items]
Unamortized bond discounts and issuance costs	$ (1,011)			$ (210)
Total carrying value of debt	33,222			31,429
Less current portion	(5,294)			(2,247)
Total noncurrent debt	27,928			29,182
Notes [Member] | 2.30% notes due 2016 (2.30% 2016 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 0			$ 750
Interest rate, stated percentage	2.30%			2.30%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 2.50% notes due 2016 (2.50% 2016 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,000			$ 1,000
Interest rate, stated percentage	2.50%			2.50%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 2.125% notes due 2017 (2.125% 2017 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,250			$ 1,250
Interest rate, stated percentage	2.125%			2.125%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | Floating Rate Notes due 2017 [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 600			$ 600
Notes [Member] | 1.25% notes due 2017 (1.25% 2017 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 850			$ 850
Interest rate, stated percentage	1.25%			1.25%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 5.85% notes due 2017 (5.85% 2017 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,100			$ 1,100
Interest rate, stated percentage	5.85%			5.85%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 6.15% notes due 2018 (6.15% 2018 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 500			$ 500
Interest rate, stated percentage	6.15%			6.15%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 606			$ 599
Interest rate, stated percentage	4.375%			4.375%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 5.70% notes due 2019 (5.70% 2019 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,000			$ 1,000
Interest rate, stated percentage	5.70%			5.70%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | Floating Rate Notes due 2019 [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 250			$ 250
Notes [Member] | 2.20% notes due 2019 (2.20% 2019 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,400			$ 1,400
Interest rate, stated percentage	2.20%			2.20%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 750			$ 733
Interest rate, stated percentage	2.125%			2.125%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 4.50% notes due 2020 (4.50% 2020 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 300			$ 300
Interest rate, stated percentage	4.50%			4.50%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 2.125% notes due 2020 (2.125% 2020 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 750			$ 750
Interest rate, stated percentage	2.125%			2.125%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 3.45% notes due 2020 (3.45% 2020 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 900			$ 900
Interest rate, stated percentage	3.45%			3.45%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 4.10% notes due 2021 (4.10% 2021 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,000			$ 1,000
Interest rate, stated percentage	4.10%			4.10%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 3.875% notes due 2021 (3.875% 2021 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,750			$ 1,750
Interest rate, stated percentage	3.875%			3.875%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 1.25% euro-denominated notes due 2022 (1.25% 2022 euro Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,388
Interest rate, stated percentage	1.25%		1.25%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 2.70% notes due 2022 (2.70% 2022 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 500			$ 500
Interest rate, stated percentage	2.70%			2.70%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 3.625% notes due 2022 (3.625% 2022 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 750			$ 750
Interest rate, stated percentage	3.625%			3.625%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 3.625% notes due 2024 (3.625% 2024 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,400			$ 1,400
Interest rate, stated percentage	3.625%			3.625%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 3.125% notes due 2025 (3.125% 2025 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,000			$ 1,000
Interest rate, stated percentage	3.125%			3.125%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 2.00% euro-denominated notes due 2026 (2.00% 2026 euro Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 833
Interest rate, stated percentage	2.00%		2.00%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 5.50% pound-sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 633			$ 700
Interest rate, stated percentage	5.50%			5.50%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 4.00% pound-sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 932			$ 1,032
Interest rate, stated percentage	4.00%			4.00%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 6.375% notes due 2037 (6.375% 2037 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 552			$ 900
Interest rate, stated percentage	6.375%			6.375%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 6.90% notes due 2038 (6.90% 2038 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 291			$ 500
Interest rate, stated percentage	6.90%			6.90%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 6.40% notes due 2039 (6.40% 2039 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 466			$ 1,000
Interest rate, stated percentage	6.40%			6.40%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 5.75% notes due 2040 (5.75% 2040 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 412			$ 700
Interest rate, stated percentage	5.75%			5.75%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 4.95% notes due 2041 (4.95% 2041 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 600			$ 600
Interest rate, stated percentage	4.95%			4.95%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 5.15% notes due 2041 (5.15% 2041 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 974			$ 2,250
Interest rate, stated percentage	5.15%			5.15%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 5.65% notes due 2042 (5.65% 2042 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 487			$ 1,250
Interest rate, stated percentage	5.65%			5.65%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 5.375% notes due 2043 (5.375% 2043 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 261			$ 1,000
Interest rate, stated percentage	5.375%			5.375%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 4.40% notes due 2045 (4.40% 2045 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,250			$ 1,250
Interest rate, stated percentage	4.40%			4.40%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 4.563% notes due 2048 (4.563% 2048 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,415
Interest rate, stated percentage	4.563%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Notes [Member] | 4.663% notes due 2051 (4.663% 2051 Notes) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 3,541
Interest rate, stated percentage	4.663%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Term Loan [Member] | Term Loan due 2018 [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 1,725			$ 1,975
Bonds [Member] | 0.41% Swiss-franc-denominated bonds due 2023 (0.41% 2023 Swiss franc Bonds) [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 717
Interest rate, stated percentage	0.41%	0.41%
Percentage of principal amount of notes that may be paid upon occurrence of change in control triggering event	101.00%
Other Notes [Member]
Debt Instrument [Line Items]
Long-term borrowings	$ 100			$ 100

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Financing arrangements (Details Textual) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Jun. 30, 2015 USD ($)	Jun. 30, 2016 GBP (£)	Jun. 30, 2016 USD ($)	Jun. 30, 2016 CHF (SFr)	Jun. 30, 2016 EUR (€)	Mar. 31, 2016 USD ($)	Mar. 31, 2016 CHF (SFr)	Feb. 29, 2016 USD ($)	Feb. 29, 2016 EUR (€)	Dec. 31, 2015 USD ($)
Debt Instrument [Line Items]
Repayment of principal amount of debt		$ 1,000	$ 2,150
Debt issuance costs					$ 13
Accounting Standards Update 2015-03 [Member] | Other Current Assets [Member]
Debt Instrument [Line Items]
Change in balances resulting from adoption of new standard												$ (3)
Accounting Standards Update 2015-03 [Member] | Short-term Debt [Member]
Debt Instrument [Line Items]
Change in balances resulting from adoption of new standard												(3)
Accounting Standards Update 2015-03 [Member] | Other Assets [Member]
Debt Instrument [Line Items]
Change in balances resulting from adoption of new standard												(124)
Accounting Standards Update 2015-03 [Member] | Long-term Debt [Member]
Debt Instrument [Line Items]
Change in balances resulting from adoption of new standard												$ (124)
Notes [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued										$ 2,200
Debt issuance costs					$ 801
Notes [Member] | 4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued | €							€ 550,000,000
Interest rate, stated percentage				4.375%	4.375%	4.375%	4.375%					4.375%
Notes [Member] | 2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued | €							€ 675,000,000
Interest rate, stated percentage				2.125%	2.125%	2.125%	2.125%					2.125%
Notes [Member] | 1.25% euro-denominated notes due 2022 (1.25% 2022 euro Notes) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued | €							€ 1,250,000,000				€ 1,250,000,000
Interest rate, stated percentage				1.25%	1.25%	1.25%	1.25%			1.25%	1.25%
Notes [Member] | 2.00% euro-denominated notes due 2026 (2.00% 2026 euro Notes) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued | €							€ 750,000,000				€ 750,000,000
Interest rate, stated percentage				2.00%	2.00%	2.00%	2.00%			2.00%	2.00%
Notes [Member] | 5.50% pound-sterling denominated notes due 2026 (5.50% 2026 pound sterling Notes) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued | £				£ 475,000,000
Interest rate, stated percentage				5.50%	5.50%	5.50%	5.50%					5.50%
Notes [Member] | 4.00% pound-sterling denominated notes due 2029 (4.00% 2029 pound sterling Notes) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued | £				£ 700,000,000
Interest rate, stated percentage				4.00%	4.00%	4.00%	4.00%					4.00%
Notes [Member] | 2.30% notes due 2016 (2.30% 2016 Notes) [Member]
Debt Instrument [Line Items]
Interest rate, stated percentage				2.30%	2.30%	2.30%	2.30%					2.30%
Repayment of principal amount of debt		$ 750
Notes [Member] | Euro-denominated Notes [Member]
Debt Instrument [Line Items]
Redemption period without payment of a make-whole amount		3 months
Notes [Member] | New Senior Notes [Member] | Interest and other income, net [Member]
Debt Instrument [Line Items]
Transaction costs	$ 24
Notes [Member] | 4.563% notes due 2048 (4.563% 2048 Notes) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued					$ 1,400
Interest rate, stated percentage				4.563%	4.563%	4.563%	4.563%
Effective interest rate				6.30%	6.30%	6.30%	6.30%
Notes [Member] | 4.663% notes due 2051 (4.663% 2051 Notes) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued					$ 3,500
Interest rate, stated percentage				4.663%	4.663%	4.663%	4.663%
Effective interest rate				5.60%	5.60%	5.60%	5.60%
Bonds [Member] | 0.41% Swiss-franc-denominated bonds due 2023 (0.41% 2023 Swiss franc Bonds) [Member]
Debt Instrument [Line Items]
Aggregate principal amount of notes issued						SFr 700,000,000		$ 704	SFr 700,000,000
Interest rate, stated percentage				0.41%	0.41%	0.41%	0.41%	0.41%	0.41%
Term Loan [Member] | Term Loan due 2018 [Member]
Debt Instrument [Line Items]
Repayment of principal amount of debt		$ 250

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Financing arrangements (Debt Exchange) (Details) - Notes [Member] $ in Millions	3 Months Ended
	Jun. 30, 2016 USD ($)
6.375% notes due 2037 (6.375% 2037 Notes) [Member]
Debt Instrument [Line Items]
Principal Amount Exchanged	$ 348
6.90% notes due 2038 (6.90% 2038 Notes) [Member]
Debt Instrument [Line Items]
Principal Amount Exchanged	209
6.40% notes due 2039 (6.40% 2039 Notes) [Member]
Debt Instrument [Line Items]
Principal Amount Exchanged	534
5.75% notes due 2040 (5.75% 2040 Notes) [Member]
Debt Instrument [Line Items]
Principal Amount Exchanged	288
5.15% notes due 2041 (5.15% 2041 Notes) [Member]
Debt Instrument [Line Items]
Principal Amount Exchanged	1,276
5.65% notes due 2042 (5.65% 2042 Notes) [Member]
Debt Instrument [Line Items]
Principal Amount Exchanged	763
5.375% notes due 2043 (5.375% 2043 Notes) [Member]
Debt Instrument [Line Items]
Principal Amount Exchanged	$ 739

XML

Stockholders' equity (Share Repurchase Program) (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015	Mar. 31, 2015	Jun. 30, 2016	Jun. 30, 2015
Equity [Abstract]
Stock repurchased, Shares	3.9	4.7	3.3	2.9	8.6	6.2
Stock repurchased	$ 591	$ 690	$ 515	$ 451	$ 1,281	$ 966

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Stockholders' equity (Details Textual) - USD ($) $ / shares in Units, $ in Billions	1 Months Ended				3 Months Ended		6 Months Ended
	Jul. 29, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Subsequent Event [Line Items]
Common stock, dividends declared per share (in usd per share)			$ 1.00	$ 1.00
Amount available for stock repurchases under a board approved stock repurchase plan		$ 3.6			$ 3.6		$ 3.6
Dividends paid per share (in usd per share)		$ 1.00	$ 1.00		$ 1.00	$ 0.79	$ 2.0	$ 1.58
Subsequent Event [Member]
Subsequent Event [Line Items]
Common stock, dividends declared per share (in usd per share)	$ 1.00

XML

Stockholders' equity (Components of AOCI) (Details) - USD ($) $ in Millions	3 Months Ended			6 Months Ended
	Jun. 30, 2016	Mar. 31, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Increase (Decrease) in AOCI [Roll Forward]
Balance as of beginning of period		$ 28,083		$ 28,083
Other	$ 1		$ 0	1	$ 0
Balance as of end of period	30,133			30,133
Foreign currency translation [Member]
Increase (Decrease) in AOCI [Roll Forward]
Balance as of beginning of period	(478)	(511)		(511)
Foreign currency translation adjustments	(22)	36
Income taxes	5	(3)
Balance as of end of period	(495)	(478)		(495)
Cash flow hedges [Member]
Increase (Decrease) in AOCI [Roll Forward]
Balance as of beginning of period	118	297		297
Unrealized (losses) gains	(144)	(117)
Reclassification adjustments to income	133	(166)
Income taxes	5	104
Balance as of end of period	112	118		112
Available-for-sale securities [Member]
Increase (Decrease) in AOCI [Roll Forward]
Balance as of beginning of period	98	(260)		(260)
Unrealized (losses) gains	268	379
Reclassification adjustments to income	23	30
Income taxes	(107)	(51)
Balance as of end of period	282	98		282
Other [Member]
Increase (Decrease) in AOCI [Roll Forward]
Balance as of beginning of period	(6)	(6)		(6)
Other	1
Balance as of end of period	(5)	(6)		(5)
AOCI [Member[
Increase (Decrease) in AOCI [Roll Forward]
Balance as of beginning of period	(268)	(480)		(480)
Foreign currency translation adjustments	(22)	36
Unrealized (losses) gains	124	262
Reclassification adjustments to income	156	(136)
Income taxes	(97)	50
Balance as of end of period	$ (106)	$ (268)		$ (106)

XML

Stockholders' equity (Reclassifications out of AOCI) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Product sales	$ 5,474	$ 5,225	$ 10,713	$ 10,099
Interest and other income, net	137	198	287	304
Interest expense, net	(313)	(277)	(607)	(529)
Total before income tax	2,204	1,997	4,462	3,873
Tax benefit (expense)	(334)	(344)	(692)	(597)
Net of taxes	1,870	1,653	3,770	3,276
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member]
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Total before income tax	(133)	226	33	112
Tax benefit (expense)	49	(81)	(12)	(40)
Net of taxes	(84)	145	21	72
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | Foreign currency contracts [Member]
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Product sales	79	91	175	160
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | Cross currency swap contracts [Member]
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Interest and other income, net	(212)	136	(142)	(47)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash Flow Hedges [Member] | Forward interest rate contract [Member]
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Interest expense, net	0	(1)	0	(1)
Reclassification out of Accumulated Other Comprehensive Income [Member] | Available-for-sale Securities [Member]
Reclassification out of Accumulated Other Comprehensive Income [Line Items]
Interest and other income, net	(23)	(9)	(53)	(44)
Tax benefit (expense)	8	3	8	16
Net of taxes	$ (15)	$ (6)	$ (45)	$ (28)

XML

Fair value measurement (Details) - USD ($) $ in Millions	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2015	Jun. 30, 2015	Mar. 31, 2015	Dec. 31, 2014
Assets:
Total available-for-sale investments	$ 34,690		$ 31,112
Fair Value, Measurements, Recurring [Member]
Derivatives:
Total assets	35,041		31,325
Derivatives:
Contingent consideration obligations in connection with business combinations	171		188
Total liabilities	658		449
Fair Value, Measurements, Recurring [Member] | Foreign currency contracts [Member]
Derivatives:
Foreign currency and cross-currency swap contracts	68		142
Derivatives:
Foreign currency and cross-currency swap contracts	27		8
Fair Value, Measurements, Recurring [Member] | Cross currency swap contracts [Member]
Derivatives:
Foreign currency and cross-currency swap contracts	17
Derivatives:
Foreign currency and cross-currency swap contracts	456		250
Fair Value, Measurements, Recurring [Member] | Interest rate swap contracts [Member]
Derivatives:
Interest rate contracts	266		71
Derivatives:
Interest rate swap contracts			3
Fair Value, Measurements, Recurring [Member] | Forward interest rate contracts [Member]
Derivatives:
Interest rate swap contracts	4
Fair Value, Measurements, Recurring [Member] | U.S. Treasury securities [Member]
Assets:
Total available-for-sale investments	8,020		4,274
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - U.S. [Member]
Assets:
Total available-for-sale investments	347		534
Fair Value, Measurements, Recurring [Member] | Other government-related debt securities - Foreign and other [Member]
Assets:
Total available-for-sale investments	1,866		1,739
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Financial [Member]
Assets:
Total available-for-sale investments	8,238		7,871
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Industrial [Member]
Assets:
Total available-for-sale investments	8,473		7,836
Fair Value, Measurements, Recurring [Member] | Corporate debt securities - Other [Member]
Assets:
Total available-for-sale investments	1,018		885
Fair Value, Measurements, Recurring [Member] | Residential mortgage-backed securities [Member]
Assets:
Total available-for-sale investments	1,738		1,470
Fair Value, Measurements, Recurring [Member] | Other mortgage- and asset-backed securities [Member]
Assets:
Total available-for-sale investments	2,180		2,469
Fair Value, Measurements, Recurring [Member] | Money market mutual funds [Member]
Assets:
Total available-for-sale investments	1,673		3,370
Fair Value, Measurements, Recurring [Member] | Other short-term interest-bearing securities [Member]
Assets:
Total available-for-sale investments	1,014		528
Fair Value, Measurements, Recurring [Member] | Equity securities [Member]
Assets:
Total available-for-sale investments	123		136
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member]
Derivatives:
Total assets	9,816		7,780
Derivatives:
Contingent consideration obligations in connection with business combinations	0		0
Total liabilities	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Foreign currency contracts [Member]
Derivatives:
Foreign currency and cross-currency swap contracts	0		0
Derivatives:
Foreign currency and cross-currency swap contracts	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Cross currency swap contracts [Member]
Derivatives:
Foreign currency and cross-currency swap contracts	0
Derivatives:
Foreign currency and cross-currency swap contracts	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Interest rate swap contracts [Member]
Derivatives:
Interest rate contracts	0		0
Derivatives:
Interest rate swap contracts			0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Forward interest rate contracts [Member]
Derivatives:
Interest rate swap contracts	0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | U.S. Treasury securities [Member]
Assets:
Total available-for-sale investments	8,020		4,274
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - U.S. [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other government-related debt securities - Foreign and other [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Financial [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Industrial [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Corporate debt securities - Other [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Residential mortgage-backed securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other mortgage- and asset-backed securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Money market mutual funds [Member]
Assets:
Total available-for-sale investments	1,673		3,370
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Other short-term interest-bearing securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Quoted prices in active markets for identical assets (Level 1) [Member] | Equity securities [Member]
Assets:
Total available-for-sale investments	123		136
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member]
Derivatives:
Total assets	25,225		23,545
Derivatives:
Contingent consideration obligations in connection with business combinations	0		0
Total liabilities	487		261
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Foreign currency contracts [Member]
Derivatives:
Foreign currency and cross-currency swap contracts	68		142
Derivatives:
Foreign currency and cross-currency swap contracts	27		8
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Cross currency swap contracts [Member]
Derivatives:
Foreign currency and cross-currency swap contracts	17
Derivatives:
Foreign currency and cross-currency swap contracts	456		250
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Interest rate swap contracts [Member]
Derivatives:
Interest rate contracts	266		71
Derivatives:
Interest rate swap contracts			3
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Forward interest rate contracts [Member]
Derivatives:
Interest rate swap contracts	4
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | U.S. Treasury securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - U.S. [Member]
Assets:
Total available-for-sale investments	347		534
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other government-related debt securities - Foreign and other [Member]
Assets:
Total available-for-sale investments	1,866		1,739
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Financial [Member]
Assets:
Total available-for-sale investments	8,238		7,871
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Industrial [Member]
Assets:
Total available-for-sale investments	8,473		7,836
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Corporate debt securities - Other [Member]
Assets:
Total available-for-sale investments	1,018		885
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Residential mortgage-backed securities [Member]
Assets:
Total available-for-sale investments	1,738		1,470
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other mortgage- and asset-backed securities [Member]
Assets:
Total available-for-sale investments	2,180		2,469
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Money market mutual funds [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Other short-term interest-bearing securities [Member]
Assets:
Total available-for-sale investments	1,014		528
Fair Value, Measurements, Recurring [Member] | Significant other observable inputs (Level 2) [Member] | Equity securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member]
Derivatives:
Total assets	0		0
Derivatives:
Contingent consideration obligations in connection with business combinations	171	$ 194	188	$ 215	$ 215	$ 215
Total liabilities	171		188
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Foreign currency contracts [Member]
Derivatives:
Foreign currency and cross-currency swap contracts	0		0
Derivatives:
Foreign currency and cross-currency swap contracts	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Cross currency swap contracts [Member]
Derivatives:
Foreign currency and cross-currency swap contracts	0
Derivatives:
Foreign currency and cross-currency swap contracts	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Interest rate swap contracts [Member]
Derivatives:
Interest rate contracts	0		0
Derivatives:
Interest rate swap contracts			0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Forward interest rate contracts [Member]
Derivatives:
Interest rate swap contracts	0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | U.S. Treasury securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - U.S. [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other government-related debt securities - Foreign and other [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Financial [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Industrial [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Corporate debt securities - Other [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Residential mortgage-backed securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other mortgage- and asset-backed securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Money market mutual funds [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Other short-term interest-bearing securities [Member]
Assets:
Total available-for-sale investments	0		0
Fair Value, Measurements, Recurring [Member] | Significant unobservable inputs (Level 3) [Member] | Equity securities [Member]
Assets:
Total available-for-sale investments	$ 0		$ 0

XML

Fair value measurement (Changes in Contingent Consideration Obligation) (Details) - Fair Value, Measurements, Recurring [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Business Combination, Contingent Consideration [Roll Forward]
Beginning balance			$ 188
Ending balance	$ 171		171
Significant unobservable inputs (Level 3) [Member]
Business Combination, Contingent Consideration [Roll Forward]
Beginning balance	194	$ 215	188	$ 215
Net changes in valuation	(23)	0	(17)	0
Ending balance	$ 171	$ 215	$ 171	$ 215

XML

Fair value measurements (Details Textual) - USD ($)		6 Months Ended
	Oct. 14, 2015	Jun. 30, 2016	Dec. 31, 2015	Oct. 31, 2015	Mar. 31, 2011
Business Acquisition [Line Items]
Length of time hedged in foreign currency contracts (or less)		3 years
Aggregate fair value of long-term debt, including current portion		$ 36,800,000,000	$ 33,100,000,000
Carrying value of long-term debt, including current portion		$ 33,222,000,000	$ 31,429,000,000
Dezima [Member]
Business Acquisition [Line Items]
Maximum additional consideration due contingent on milestones	$ 1,250,000,000.00			$ 1,250,000,000.00
Estimated fair values of contingent consideration obligations	$ 110,000,000
BioVex [Member]
Business Acquisition [Line Items]
Maximum additional consideration due contingent on milestones					$ 325,000,000
Other Government-related and Corporate Debt Securities [Member]
Business Acquisition [Line Items]
Investment maturity period		5 years

XML

Derivative instruments (Details Textual) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015	Dec. 31, 2015
Derivative Instruments Gain Loss [Line Items]
Length of time hedged in foreign currency contracts			3 years
Interest expense, net [Member]
Derivative Instruments Gain Loss [Line Items]
Unrealized gain (loss) on the hedged debt	$ (49)	$ 83	$ (198)	$ (6)
Unrealized gain (loss) on interest rate swaps	49	$ (83)	198	$ 6
Foreign currency forward contracts [Member] | Derivatives designated as hedging instrument [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative, notional amount	3,500		3,500		$ 3,300
Foreign currency forward contracts [Member] | Derivatives not designated as hedging instrument [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative, notional amount	727		727		911
Foreign currency option contracts [Member] | Derivatives designated as hedging instrument [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative, notional amount	225		225		225
Forward interest rate contracts [Member]
Derivative Instruments Gain Loss [Line Items]
Amounts expected to be reclassified from AOCI into earnings over the next 12 months	(1)		(1)
Forward interest rate contracts [Member] | Cash flow hedge [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative, notional amount	500		500
Foreign currency and cross currency swap contracts [Member]
Derivative Instruments Gain Loss [Line Items]
Amounts expected to be reclassified from AOCI into earnings over the next 12 months	124		124
Interest rate swap [Member] | Derivatives designated as hedging instrument [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative, notional amount	$ 6,650		$ 6,650		$ 6,650
Rate adjustment to LIBOR on interest rate swap agreements [Member] | LIBOR [Member] | Minimum [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative, variable interest rate	0.40%		0.40%
Rate adjustment to LIBOR on interest rate swap agreements [Member] | LIBOR [Member] | Maximum [Member]
Derivative Instruments Gain Loss [Line Items]
Derivative, variable interest rate	2.00%		2.00%

XML

Derivative instruments (Cross-currency Swaps) (Details) - Cash flow hedge [Member] - Cross currency swap contracts [Member] € in Millions, £ in Millions, SFr in Millions, $ in Millions	Jun. 30, 2016 GBP (£)	Jun. 30, 2016 USD ($)	Jun. 30, 2016 CHF (SFr)	Jun. 30, 2016 EUR (€)
2.125% 2019 euro Notes [Member]
Derivative [Line Items]
Notional amount		$ 864		€ 675
2.125% 2019 euro Notes [Member] | Interest rate received [Member]
Derivative [Line Items]
Interest rate	2.125%	2.125%	2.125%	2.125%
2.125% 2019 euro Notes [Member] | Interest rate paid [Member]
Derivative [Line Items]
Interest rate	2.60%	2.60%	2.60%	2.60%
1.25% 2022 euro Notes [Member]
Derivative [Line Items]
Notional amount		$ 1,388		€ 1,250
1.25% 2022 euro Notes [Member] | Interest rate received [Member]
Derivative [Line Items]
Interest rate	1.25%	1.25%	1.25%	1.25%
1.25% 2022 euro Notes [Member] | Interest rate paid [Member]
Derivative [Line Items]
Interest rate	3.20%	3.20%	3.20%	3.20%
0.41% 2023 Swiss franc Bonds [Member[
Derivative [Line Items]
Notional amount		$ 704	SFr 700
0.41% 2023 Swiss franc Bonds [Member[ | Interest rate received [Member]
Derivative [Line Items]
Interest rate	0.41%	0.41%	0.41%	0.41%
0.41% 2023 Swiss franc Bonds [Member[ | Interest rate paid [Member]
Derivative [Line Items]
Interest rate	3.40%	3.40%	3.40%	3.40%
2.00% 2026 euro Notes [Member]
Derivative [Line Items]
Notional amount		$ 833		€ 750
2.00% 2026 euro Notes [Member] | Interest rate received [Member]
Derivative [Line Items]
Interest rate	2.00%	2.00%	2.00%	2.00%
2.00% 2026 euro Notes [Member] | Interest rate paid [Member]
Derivative [Line Items]
Interest rate	3.90%	3.90%	3.90%	3.90%
5.50% 2026 pound sterling Notes [Member]
Derivative [Line Items]
Notional amount	£ 475	$ 747
5.50% 2026 pound sterling Notes [Member] | Interest rate received [Member]
Derivative [Line Items]
Interest rate	5.50%	5.50%	5.50%	5.50%
5.50% 2026 pound sterling Notes [Member] | Interest rate paid [Member]
Derivative [Line Items]
Interest rate	6.00%	6.00%	6.00%	6.00%
4.00% 2029 pound sterling Notes [Member]
Derivative [Line Items]
Notional amount	£ 700	$ 1,111
4.00% 2029 pound sterling Notes [Member] | Interest rate received [Member]
Derivative [Line Items]
Interest rate	4.00%	4.00%	4.00%	4.00%
4.00% 2029 pound sterling Notes [Member] | Interest rate paid [Member]
Derivative [Line Items]
Interest rate	4.50%	4.50%	4.50%	4.50%

XML

Derivative instruments (Effective Portion of Unrealized Gain (Loss)) (Details) - Cash flow hedge [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net	$ (144)	$ 44	$ (261)	$ 212
Foreign currency contracts [Member]
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net	86	(99)	(62)	293
Cross currency swap contracts [Member]
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net	(226)	143	(195)	(81)
Forward interest rate contracts [Member]
Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges
Unrealized gain (loss) on derivative instruments recognized in Other Comprehensive Income, effective portion, net	$ (4)	$ 0	$ (4)	$ 0

XML

Derivative instruments (Locations and Effective Portions of Gain (Loss) Reclassified out of AOCI) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Derivative Instruments Gain Loss [Line Items]
Product sales	$ 5,474	$ 5,225	$ 10,713	$ 10,099
Interest and other income, net	137	198	287	304
Interest expense, net	(313)	(277)	(607)	(529)
Income before income taxes	2,204	1,997	4,462	3,873
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member]
Derivative Instruments Gain Loss [Line Items]
Income before income taxes	(133)	226	33	112
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Foreign currency contracts [Member]
Derivative Instruments Gain Loss [Line Items]
Product sales	79	91	175	160
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cross currency swap contracts [Member]
Derivative Instruments Gain Loss [Line Items]
Interest and other income, net	(212)	136	(142)	(47)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Forward interest rate contracts [Member]
Derivative Instruments Gain Loss [Line Items]
Interest expense, net	0	(1)	0	(1)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member]
Derivative Instruments Gain Loss [Line Items]
Income before income taxes	(133)	226	33	112
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | Foreign currency contracts [Member]
Derivative Instruments Gain Loss [Line Items]
Product sales	79	91	175	160
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | Cross currency swap contracts [Member]
Derivative Instruments Gain Loss [Line Items]
Interest and other income, net	(212)	136	(142)	(47)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member] | Reclassification out of Accumulated Other Comprehensive Income [Member] | Cash flow hedge [Member] | Forward interest rate contracts [Member]
Derivative Instruments Gain Loss [Line Items]
Interest expense, net	$ 0	$ (1)	$ 0	$ (1)

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Derivative instruments (Locations and Gain (Loss) for Derivatives Not Designated as Hedging Instruments) (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2016	Jun. 30, 2015	Jun. 30, 2016	Jun. 30, 2015
Foreign currency contracts [Member] | Interest and other income, net [Member]
Location in the Condensed Consolidated Statements of Income and the amount of gain (loss) recognized in earnings for our derivative instruments not designated as hedging instruments
Amount of gain (loss) recognized in interest and other income, net	$ (24)	$ 20	$ (34)	$ (9)

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Derivative instruments (Fair Value of Derivatives) (Details) - USD ($) $ in Millions	Jun. 30, 2016	Dec. 31, 2015
Assets
Total derivative assets, fair value	$ 351	$ 213
Liabilities
Total derivative liabilities, fair value	487	261
Derivatives designated as hedging instrument [Member]
Assets
Total derivative assets, fair value	351	213
Liabilities
Total derivative liabilities, fair value	486	260
Derivatives designated as hedging instrument [Member] | Foreign currency contracts [Member] | Other current assets/Other noncurrent assets [Member]
Assets
Total derivative assets, fair value	68	142
Derivatives designated as hedging instrument [Member] | Foreign currency contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member]
Liabilities
Total derivative liabilities, fair value	26	7
Derivatives designated as hedging instrument [Member] | Cross currency swap contracts [Member] | Other current assets/Other noncurrent assets [Member]
Assets
Total derivative assets, fair value	17	0
Derivatives designated as hedging instrument [Member] | Cross currency swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member]
Liabilities
Total derivative liabilities, fair value	456	250
Derivatives designated as hedging instrument [Member] | Forward interest rate contracts [Member] | Other current assets/Other noncurrent assets [Member]
Assets
Total derivative assets, fair value	0
Derivatives designated as hedging instrument [Member] | Forward interest rate contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member]
Liabilities
Total derivative liabilities, fair value	4
Derivatives designated as hedging instrument [Member] | Interest rate swap contracts [Member] | Other current assets/Other noncurrent assets [Member]
Assets
Total derivative assets, fair value	266	71
Derivatives designated as hedging instrument [Member] | Interest rate swap contracts [Member] | Accrued liabilities/Other noncurrent liabilities [Member]
Liabilities
Total derivative liabilities, fair value	0	3
Derivatives not designated as hedging instrument [Member]
Assets
Total derivative assets, fair value	0	0
Liabilities
Total derivative liabilities, fair value	1	1
Derivatives not designated as hedging instrument [Member] | Foreign currency contracts [Member] | Other current assets [Member]
Assets
Total derivative assets, fair value	0	0
Derivatives not designated as hedging instrument [Member] | Foreign currency contracts [Member] | Accrued liabilities [Member]
Liabilities
Total derivative liabilities, fair value	$ 1	$ 1