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EX-31 - RULE 13A-14(A) CERTIFICATIONS - AMGEN INCamgn-ex31_2015930xq3.htm
EX-32 - SECTION 1350 CERTIFICATIONS - AMGEN INCamgn-ex32_2015930xq3.htm
EX-10.4 - FORM OF GLOBAL RSU AGREEMENT - AMGEN INCamgn-ex104_2015930xq3.htm
EX-10.6 - FORM OF PERFORMANCE UNIT AGREEMENT - AMGEN INCamgn-ex106_2015930xq3.htm
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 September 30, 2015
OR
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 000-12477
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 October 27, 2015, the registrant had 754,327,866 shares of common stock, $0.0001 par value, outstanding.



AMGEN INC.
INDEX
 

i


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
 
Nine months ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Revenues:
 
 
 
 
 
 
 
Product sales
$
5,516

 
$
4,848

 
$
15,615

 
$
14,153

Other revenues
207

 
183

 
511

 
579

Total revenues
5,723

 
5,031

 
16,126

 
14,732

 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
Cost of sales
1,034

 
1,068

 
3,156

 
3,239

Research and development
1,119

 
1,018

 
2,977

 
3,063

Selling, general and administrative
1,244

 
1,213

 
3,430

 
3,372

Other
(13
)
 
266

 
126

 
326

Total operating expenses
3,384

 
3,565

 
9,689

 
10,000

 
 
 
 
 
 
 
 
Operating income
2,339

 
1,466

 
6,437

 
4,732

 
 
 
 
 
 
 
 
Interest expense, net
282

 
269

 
811

 
810

Interest and other income, net
135

 
140

 
439

 
377

 
 
 
 
 
 
 
 
Income before income taxes
2,192

 
1,337

 
6,065

 
4,299

 
 
 
 
 
 
 
 
Provision for income taxes
329

 
93

 
926

 
435

 
 
 
 
 
 
 
 
Net income
$
1,863

 
$
1,244

 
$
5,139

 
$
3,864

 
 
 
 
 
 
 
 
Earnings per share:
 
 
 
 
 
 
 
Basic
$
2.46

 
$
1.63

 
$
6.76

 
$
5.10

Diluted
$
2.44

 
$
1.61

 
$
6.70

 
$
5.02

 
 
 
 
 
 
 
 
Shares used in calculation of earnings per share:
 
 
 
 
 
 
 
Basic
757

 
761

 
760

 
758

Diluted
764

 
771

 
767

 
769

 
 
 
 
 
 
 
 
Dividends paid per share
$
0.79

 
$
0.61

 
$
2.37

 
$
1.83


See accompanying notes.

1


AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)
(Unaudited)
 
Three months ended
 
Nine months ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Net income
$
1,863

 
$
1,244

 
$
5,139

 
$
3,864

Other comprehensive (loss) income, net of reclassification adjustments and taxes:
 
 
 
 
 
 
 
Foreign currency translation losses
(86
)
 
(124
)
 
(241
)
 
(125
)
Effective portion of cash flow hedges
(53
)
 
228

 
10

 
205

Net unrealized losses on available-for-sale securities
(35
)
 
(94
)
 
(3
)
 
(33
)
Other
5

 
9

 
5

 
10

Other comprehensive (loss) income, net of tax
(169
)
 
19

 
(229
)
 
57

Comprehensive income
$
1,694

 
$
1,263

 
$
4,910

 
$
3,921


See accompanying notes.

2


AMGEN INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In millions, except per share data)
(Unaudited)
 
September 30,
2015
 
December 31,
2014
ASSETS
Current assets:
 
 
 
Cash and cash equivalents
$
3,226

 
$
3,731

Marketable securities
27,894

 
23,295

Trade receivables, net
2,901

 
2,546

Inventories
2,531

 
2,647

Other current assets
2,292

 
2,494

Total current assets
38,844

 
34,713

 
 
 
 
Property, plant and equipment, net
4,988

 
5,223

Intangible assets, net
11,613

 
12,693

Goodwill
14,674

 
14,788

Other assets
1,750

 
1,592

Total assets
$
71,869

 
$
69,009

 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
 
 
 
Accounts payable
$
1,067

 
$
1,212

Accrued liabilities
4,848

 
5,296

Current portion of long-term debt
1,250

 
500

Total current liabilities
7,165

 
7,008

 
 
 
 
Long-term debt
30,511

 
30,215

Long-term deferred tax liability
3,109

 
3,461

Other noncurrent liabilities
3,117

 
2,547

 
 
 
 
Contingencies and commitments

 

 
 
 
 
Stockholders’ equity:
 
 
 
Common stock and additional paid-in capital; $0.0001 par value; 2,750.0 shares authorized; outstanding - 754.9 shares in 2015 and 760.4 shares in 2014
30,556

 
30,410

Accumulated deficit
(2,352
)
 
(4,624
)
Accumulated other comprehensive loss
(237
)
 
(8
)
Total stockholders’ equity
27,967

 
25,778

Total liabilities and stockholders’ equity
$
71,869

 
$
69,009


See accompanying notes.

3


AMGEN INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
(Unaudited)
 
Nine months ended
 
September 30,
 
2015
 
2014
Cash flows from operating activities:
 
 
 
Net income
$
5,139

 
$
3,864

Depreciation and amortization
1,566

 
1,567

Stock-based compensation expense
242

 
302

Deferred income taxes
(251
)
 
296

Other items, net
(221
)
 
(260
)
Changes in operating assets and liabilities, net of acquisitions:
 
 
 
Trade receivables, net
(302
)
 
345

Inventories
284

 
99

Other assets
192

 
(120
)
Accounts payable
(127
)
 
104

Accrued income taxes
478

 
(324
)
Other liabilities
17

 
237

Net cash provided by operating activities
7,017

 
6,110

Cash flows from investing activities:
 
 
 
Purchases of property, plant and equipment
(389
)
 
(515
)
Proceeds from sale of property, plant and equipment
271

 

Cash paid for acquisitions, net of cash acquired

 
(115
)
Purchase of intangible assets
(55
)
 
(150
)
Purchases of marketable securities
(19,792
)
 
(20,831
)
Proceeds from sales of marketable securities
11,784

 
11,060

Proceeds from maturities of marketable securities
3,179

 
3,962

Change in restricted investments

 
533

Other
(312
)
 
(70
)
Net cash used in investing activities
(5,314
)
 
(6,126
)
Cash flows from financing activities:
 
 
 
Net proceeds from issuance of debt
3,464

 
4,476

Repayment of debt
(2,275
)
 
(3,480
)
Repurchases of common stock
(1,684
)
 

Dividends paid
(1,800
)
 
(1,387
)
Net proceeds from issuance of common stock in connection with the Company’s equity award programs
65

 
153

Settlement of contingent consideration obligation
(225
)
 

Other
247

 
126

Net cash used in financing activities
(2,208
)
 
(112
)
Decrease in cash and cash equivalents
(505
)
 
(128
)
Cash and cash equivalents at beginning of period
3,731

 
3,805

Cash and cash equivalents at end of period
$
3,226

 
$
3,677

See accompanying notes.

4


AMGEN INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
(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 nine months ended September 30, 2015 and 2014, 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, 2014, and with our condensed consolidated financial statements and the notes thereto contained in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2015, and June 30, 2015.
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 any variable 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 $7.4 billion and $7.0 billion as of September 30, 2015, and December 31, 2014, respectively.
Recent accounting pronouncements
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 new standard, as amended, is effective for interim and annual periods beginning January 1, 2018, and may be adopted earlier, but not before January 1, 2017. The new standard is required to be adopted using either a full retrospective or a modified retrospective approach. We are currently evaluating the impact that this new standard will have on our consolidated financial statements.
In April 2015, the FASB issued a new accounting standard that amends the presentation for debt issuance costs. Upon adoption of the standard, such costs will be presented on our consolidated balance sheets as a direct deduction from the carrying amount of the related debt liability and not as a deferred charge presented in Other assets on our consolidated balance sheets. This new standard is effective for interim and annual periods beginning on January 1, 2016, and is required to be retrospectively adopted. We do not expect that adoption of this new standard will have a material impact on our consolidated financial statements.
2. Restructuring
During the second half of 2014, we initiated a restructuring plan to invest in continuing innovation and the launch of our new pipeline molecules, while improving our cost structure. As part of the plan, we are closing 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.

5


We continue to estimate that we will incur $935 million to $1,035 million of pre-tax charges in connection with our restructuring plan, 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 $400 million to $450 million consisting primarily of asset impairments, accelerated depreciation and other related costs resulting from the consolidation of our worldwide facilities. We incurred a total of $482 million of separation and other headcount-related costs and $242 million of asset-related charges through September 30, 2015.
During the three and nine months ended September 30, 2015, we incurred $11 million and $166 million, respectively, of restructuring costs. We expect that we will incur most of the remaining estimated costs, as discussed above, during the remainder of 2015 and in 2016 in order to support our ongoing transformation and process improvement efforts.
The following tables summarize recorded charges related to the restructuring plan by type of activity and the locations recognized within the Condensed Consolidated Statements of Income (in millions):
 
 
Three months ended September 30, 2015

 
 
Separation costs
 
Asset impairments
 
Accelerated depreciation
 
Other
 
Total
Cost of sales
 
$

 
$

 
$
12

 
$
1

 
$
13

Research and development
 

 

 
6

 
7

 
13

Selling, general and administrative
 

 

 
4

 
7

 
11

Other
 
2

 
(31
)
 

 
3

 
(26
)
Total
 
$
2

 
$
(31
)
 
$
22

 
$
18

 
$
11

 
 
Nine months ended September 30, 2015
 
 
Separation costs
 
Asset impairments
 
Accelerated depreciation
 
Other
 
Total
Cost of sales
 
$

 
$

 
$
38

 
$
4

 
$
42

Research and development
 

 

 
27

 
21

 
48

Selling, general and administrative
 

 

 
10

 
25

 
35

Other
 
57

 
(31
)
 

 
15

 
41

Total
 
$
57

 
$
(31
)
 
$
75

 
$
65

 
$
166

We recognized asset impairment and accelerated depreciation charges in connection with our decision to exit Boulder and Longmont, Colorado, Bothell and Seattle, Washington and the consolidation of facilities in Thousand Oaks, California. The decision to close these manufacturing and research and development (R&D) facilities was based principally on optimizing the utilization of our sites in the United States, which includes an expansion of our presence in the key U.S. biotechnology hubs of South San Francisco, California and Cambridge, Massachusetts. During the three months ended September 30, 2015, we recognized a gain from the sale of assets related to these site closures.
The following table summarizes the charges (excluding non-cash items) and payments related to the restructuring plan (in millions):
 
During the nine months ended September 30, 2015
 
Separation costs
 
Other
 
Total
Restructuring liabilities as of December 31, 2014
$
221

 
$
23

 
$
244

Expense
59

 
56

 
115

Payments
(172
)
 
(67
)
 
(239
)
Restructuring liabilities as of September 30, 2015
$
108

 
$
12

 
$
120


6


3. Income taxes
The effective tax rates for the three and nine months ended September 30, 2015, were 15.0% and 15.3%, respectively, compared with 7.0% and 10.1% for the corresponding periods of the prior year. The effective rates are different from the federal statutory rates primarily as a result of indefinitely reinvested 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 of the United States. In addition, the effective tax rates for the three and nine months ended September 30, 2015 and 2014, were reduced by foreign tax credits associated with the Puerto Rico excise tax described below.
The increase in our effective tax rate for the three months ended September 30, 2015, was due primarily to the unfavorable tax impact of changes in the jurisdictional mix of income and expenses and lower domestic restructuring costs, offset partially by certain discrete items, including a transfer pricing adjustment recognized in the three months ended September 30, 2015.
The increase in our effective tax rate for the nine months ended September 30, 2015, was due primarily to the unfavorable tax impact of changes in the jurisdictional mix of income and expenses and lower domestic restructuring costs, offset partially by certain discrete items, including a state tax audit settlement in the three months ended March 31, 2015, and a transfer pricing adjustment recognized in the three months ended September 30, 2015.
Puerto Rico imposes an excise tax on the gross intercompany purchase price of goods and services from our manufacturing subsidiary in Puerto Rico. The rate is 4.0% effective July 1, 2013, 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 income and deductions, the use of tax credits and the allocations of income 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.
During the three and nine months ended September 30, 2015, the gross amount of our unrecognized tax benefits (UTBs) increased by approximately $125 million and $335 million, respectively, as a result of tax positions taken during the current year. The UTB balance decreased by approximately $70 million during the nine months ended September 30, 2015, due to state tax audit settlements. Substantially all of the UTBs as of September 30, 2015, if recognized, would affect our effective tax rate.
4. 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 awards and restricted stock and performance unit awards, 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
 
Nine months ended
 
September 30,
 
September 30,
 
2015
 
2014
 
2015
 
2014
Income (Numerator):
 
 
 
 
 
 
 
Net income for basic and diluted EPS
$
1,863

 
$
1,244

 
$
5,139

 
$
3,864

 
 
 
 
 
 
 
 
Shares (Denominator):
 
 
 
 
 
 
 
Weighted-average shares for basic EPS
757

 
761

 
760

 
758

Effect of dilutive securities
7

 
10

 
7

 
11

Weighted-average shares for diluted EPS
764

 
771

 
767

 
769

 
 
 
 
 
 
 
 
Basic EPS
$
2.46

 
$
1.63

 
$
6.76

 
$
5.10

Diluted EPS
$
2.44

 
$
1.61

 
$
6.70

 
$
5.02


7


For the three and nine months ended September 30, 2015 and 2014, the number of anti-dilutive employee stock-based awards excluded from the computation of diluted EPS was not significant.
5. Collaborative arrangements
A collaborative arrangement is a contractual arrangement that involves a joint operating activity. These arrangements involve two or more parties that are both: (i) active participants in the activity; and (ii) exposed to significant risks and rewards dependent on the commercial success of the activity.
From time to time, we enter into collaborative arrangements for the R&D, manufacture and/or commercialization of products and/or product candidates. These collaborations generally provide for non-refundable upfront license fees, development and commercial performance milestone payments, cost sharing, royalty payments and/or profit sharing. Our collaboration agreements are performed with no guarantee of either technological or commercial success and each is unique in nature. Below are our significant arrangements which have had material changes in their terms since the filing of our Annual Report on Form 10-K for the year ended December 31, 2014.
AstraZeneca Plc.
We are in a collaboration with AstraZeneca Plc. (AstraZeneca) to jointly develop and commercialize certain antibodies from Amgen's clinical inflammation portfolio, including AMG 157, AMG 181, AMG 557 and AMG 570. The agreement covers the worldwide development and commercialization of these antibodies, except for AMG 557 and AMG 570 in Japan. AMG 139 and brodalumab were formerly part of the collaboration in certain territories. As of April 1, 2015, we suspended our participation in the co-development and commercialization of AMG 139, with the option of resuming such participation at a later date. As of August 26, 2015, we terminated our participation in the co-development and commercialization of brodalumab based on events of suicidal ideation and behavior in the program. From and after such termination, the clinical development and commercialization of brodalumab are at the sole discretion and expense of AstraZeneca. If AstraZeneca commercializes brodalumab, Amgen would receive a mid-single-digit to low-double-digit royalty on net sales of brodalumab.
Under the terms of the agreement, approximately 65% of related development costs for the 2012-2014 periods were funded by AstraZeneca; beginning in 2015, the companies share costs equally. For each remaining collaboration product approved for sale, Amgen would receive a mid-single-digit royalty, after which the worldwide commercialization profits and losses related to such remaining collaboration products would be shared equally. During the three months ended September 30, 2015 and 2014, cost recoveries recognized for development costs, which included brodalumab and AMG 139, were $25 million and $28 million, respectively, which were included in Research and development expense in the Condensed Consolidated Statements of Income. During the nine months ended September 30, 2015 and 2014, the cost recoveries were $48 million and $77 million, respectively.
The collaboration agreement will continue in effect unless terminated in accordance with its terms.
Bayer HealthCare Pharmaceuticals Inc.
As part of the Onyx Pharmaceuticals Inc. (Onyx) transaction, we acquired a collaboration with Bayer HealthCare Pharmaceuticals Inc. (Bayer) to jointly develop and commercialize Nexavar® (sorafenib) worldwide, except in Japan. The rights to develop and market Nexavar® in Japan are reserved to Bayer. Bayer has no obligation to pay royalties to Amgen for sales of Nexavar® in Japan.    
Nexavar® is currently marketed and sold in more than 100 countries around the world for the treatment of unresectable liver cancer and advanced kidney cancer. In the United States, Nexavar® is also approved for the treatment of patients with locally recurrent or metastatic, progressive, differentiated thyroid carcinoma refractory to radioactive iodine treatment.
In May 2015, we and Bayer amended the terms of the agreement, which terminated the co-promotion agreement in the United States. The termination was effective as of June 30, 2015 and transferred all U.S. operational responsibilities to Bayer, including commercial and medical affairs activities. Prior to the termination of the co-promotion agreement, we co-promoted Nexavar® with Bayer and shared equally in the profits or losses in the United States. In lieu of this profit share, Bayer now pays Amgen a royalty on U.S. sales of Nexavar® at a percentage rate in the high 30s. Amgen will no longer contribute sales force personnel or medical liaisons to support Nexavar® in the United States. There are no changes to the global research and development or non-U.S. profit share arrangements in the original agreement, as discussed below.
In all countries outside the United States, excluding Japan, Bayer manages all commercialization activities and incurs all of the sales and marketing expenditures and mutually agreed R&D expenses, for which we continue to reimburse Bayer for half. In these countries, we continue to receive 50% of net profits on sales of Nexavar® after deducting certain Bayer-related costs.

8


The agreement with Bayer will terminate at the later of the date when patents expire that were issued in connection with product candidates discovered under the agreement, or on the last day when we or Bayer market or sell products commercialized under the agreement anywhere in the world.
We do not expect that the amendment to the collaboration will have a material impact on our consolidated results of operations. Prior to the amendment, Amgen was acting as an agent under the agreement and as such, revenue was derived by calculating net sales of Nexavar® to third-party customers and deducting the cost of goods sold, distribution costs, marketing costs, phase 4 clinical trial costs, allocable overhead costs and certain other costs. During the three months ended September 30, 2015 and 2014, Amgen recorded Nexavar® net profits of $48 million and $73 million, respectively, which were recognized as Other revenues in the Condensed Consolidated Statements of Income. During the nine months ended September 30, 2015 and 2014, net profits were $204 million and $238 million, respectively. Pursuant to the May 2015 amendment to the agreement, Amgen recorded royalty income of $33 million on U.S. sales of Nexavar® in Other revenues in the Condensed Consolidated Statements of Income during the three months ended September 30, 2015. In addition, during the three months ended September 30, 2015 and 2014, net R&D expenses related to the agreement were $4 million and $9 million, respectively, which were recognized in the Condensed Consolidated Statements of Income. During the nine months ended September 30, 2015 and 2014, the net R&D expenses were $16 million and $30 million, respectively.
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 September 30, 2015
 
Amortized
cost
 
Gross
unrealized
gains
 
Gross
unrealized
losses
 
Estimated
fair
value
U.S. Treasury securities
 
$
4,255

 
$
37

 
$
(1
)
 
$
4,291

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 
704

 
3

 

 
707

Foreign and other
 
1,706

 
15

 
(32
)
 
1,689

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 
8,106

 
33

 
(19
)
 
8,120

Industrial
 
8,134

 
30

 
(110
)
 
8,054

Other
 
883

 
3

 
(9
)
 
877

Residential mortgage-backed securities
 
1,514

 
9

 
(7
)
 
1,516

Other mortgage- and asset-backed securities
 
2,251

 
5

 
(39
)
 
2,217

Money market mutual funds
 
2,661

 

 

 
2,661

Other short-term interest-bearing securities
 
533

 

 

 
533

Total interest-bearing securities
 
30,747

 
135

 
(217
)
 
30,665

Equity securities
 
87

 
48

 

 
135

Total available-for-sale investments
 
$
30,834

 
$
183

 
$
(217
)
 
$
30,800



9


Type of security as of December 31, 2014

Amortized
cost

Gross
unrealized
gains

Gross
unrealized
losses

Estimated
fair
value
U.S. Treasury securities

$
3,632


$
22


$
(8
)

$
3,646

Other government-related debt securities:








U.S.

530


1


(3
)

528

Foreign and other

1,572


21


(24
)

1,569

Corporate debt securities:








Financial

6,036


21


(16
)

6,041

Industrial

6,394


23


(66
)

6,351

Other

650


3


(4
)

649

Residential mortgage-backed securities

1,708


4


(10
)

1,702

Other mortgage- and asset-backed securities

1,837




(41
)

1,796

Money market mutual funds

3,004






3,004

Other short-term interest-bearing securities

1,302






1,302

Total interest-bearing securities

26,665


95


(172
)

26,588

Equity securities

98


48


(2
)

144

Total available-for-sale investments

$
26,763


$
143


$
(174
)

$
26,732

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
 
September 30,
2015
 
December 31,
2014
Cash and cash equivalents
 
$
2,771

 
$
3,293

Marketable securities
 
27,894

 
23,295

Other assets — noncurrent
 
135

 
144

Total available-for-sale investments
 
$
30,800

 
$
26,732

Cash and cash equivalents in the table above excludes cash of $455 million and $438 million as of September 30, 2015, and December 31, 2014, 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
 
September 30,
2015
 
December 31,
2014
Maturing in one year or less
 
$
3,859

 
$
4,936

Maturing after one year through three years
 
9,331

 
6,829

Maturing after three years through five years
 
10,093

 
7,840

Maturing after five years through ten years
 
3,433

 
3,267

Maturing after ten years
 
216

 
218

Mortgage- and asset-backed securities
 
3,733

 
3,498

Total interest-bearing securities
 
$
30,665

 
$
26,588

For the three months ended September 30, 2015 and 2014, realized gains totaled $19 million and $17 million, respectively, and realized losses totaled $58 million and $28 million, respectively. For the nine months ended September 30, 2015 and 2014, realized gains totaled $73 million and $102 million, respectively, and realized losses totaled $156 million and $71 million, respectively. The cost of securities sold is based on the specific identification method.

10


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 September 30, 2015
 
Fair value
 
Unrealized losses
 
Fair value
 
Unrealized losses
U.S. Treasury securities
 
$
345

 
$
(1
)
 
$
18

 
$

Other government-related debt securities:
 

 

 

 

Foreign and other
 
931

 
(29
)
 
61

 
(3
)
Corporate debt securities:
 

 

 

 

Financial
 
2,603

 
(17
)
 
276

 
(2
)
Industrial
 
3,957

 
(85
)
 
745

 
(25
)
Other
 
480

 
(7
)
 
33

 
(2
)
Residential mortgage-backed securities
 
286

 
(2
)
 
328

 
(5
)
Other mortgage- and asset-backed securities
 
539

 
(8
)
 
561

 
(31
)
Total
 
$
9,141

 
$
(149
)
 
$
2,022

 
$
(68
)
    
 
 
Less than 12 months
 
12 months or greater
Type of security as of December 31, 2014
 
Fair value
 
Unrealized losses
 
Fair value
 
Unrealized losses
U.S. Treasury securities
 
$
1,770

 
$
(7
)
 
$
171

 
$
(1
)
Other government-related debt securities:
 

 

 

 

U.S.
 
160

 

 
178

 
(3
)
Foreign and other
 
514

 
(14
)
 
159

 
(10
)
Corporate debt securities:
 

 

 

 

Financial
 
3,150

 
(14
)
 
158

 
(2
)
Industrial
 
3,931

 
(62
)
 
222

 
(4
)
Other
 
354

 
(4
)
 
5

 

Residential mortgage-backed securities
 
614

 
(4
)
 
413

 
(6
)
Other mortgage- and asset-backed securities
 
1,071

 
(8
)
 
561

 
(33
)
Equity securities
 
5

 
(2
)
 

 

Total
 
$
11,569

 
$
(115
)
 
$
1,867

 
$
(59
)
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 due to new developments or changes in assumptions related to any particular security. As of September 30, 2015, and December 31, 2014, we believe the cost bases for our available-for-sale investments were recoverable in all material respects.


11


7. Inventories
Inventories consisted of the following (in millions):
 
September 30,
2015
 
December 31,
2014
Raw materials
$
221

 
$
198

Work in process
1,348

 
1,551

Finished goods
962

 
898

Total inventories
$
2,531

 
$
2,647

8. Goodwill and other intangible assets
Goodwill
Changes in the carrying amounts of goodwill were as follows (in millions):
 
Nine months ended September 30,
 
2015
 
2014
Beginning balance
$
14,788

 
$
14,968

Goodwill related to acquisitions of businesses(1)

 
(114
)
Currency translation adjustments
(114
)
 
(39
)
Ending balance
$
14,674

 
$
14,815

(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):
 
September 30, 2015
 
December 31, 2014
 
Gross
carrying
amount
 
Accumulated
amortization
 
Intangible
assets, net
 
Gross
carrying
amount
 
Accumulated
amortization
 
Intangible
assets, net
Finite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
Developed product technology rights
$
10,808

 
$
(4,779
)
 
$
6,029

 
$
10,826

 
$
(4,155
)
 
$
6,671

Licensing rights
3,261

 
(923
)
 
2,338

 
3,236

 
(696
)
 
2,540

R&D technology rights
1,153

 
(640
)
 
513

 
1,167

 
(569
)
 
598

Marketing-related rights
1,203

 
(611
)
 
592

 
1,241

 
(512
)
 
729

Total finite-lived intangible assets
16,425

 
(6,953
)
 
9,472

 
16,470

 
(5,932
)
 
10,538

Indefinite-lived intangible assets:
 
 
 
 
 
 
 
 
 
 
 
In-process research and development
2,141

 

 
2,141

 
2,155

 

 
2,155

Total identifiable intangible assets
$
18,566

 
$
(6,953
)
 
$
11,613

 
$
18,625

 
$
(5,932
)
 
$
12,693

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. 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.
In-process research and development (IPR&D) consists of R&D projects acquired in a business combination which are not complete due to remaining technological risks and/or lack of receipt of the required regulatory approvals. As of September 30, 2015, these projects include Kyprolis® (carfilzomib) for Injection and oprozomib acquired in the acquisition of Onyx, etelcalcetide (formerly AMG 416) acquired in the acquisition of KAI Pharmaceuticals and IMLYGIC(talimogene laherparepvec) acquired

12


in the acquisition of BioVex Group, Inc. (BioVex). In October 2015, the U.S. Food and Drug Administration (FDA) approved IMLYGIC for the local treatment of unresectable cutaneous, subcutaneous and nodal lesions in patients with melanoma recurrent after initial surgery. As a result, the $675 million carrying value of IMLYGICwill be reclassified from IPR&D to Developed product technology rights during the fourth quarter of 2015, and will be amortized over its estimated useful life.
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 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, 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 annually for impairment and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
During the three months ended September 30, 2015 and 2014, we recognized amortization charges associated with our finite-lived intangible assets of $340 million and $339 million, respectively. During each of the nine months ended September 30, 2015 and 2014, we recognized amortization charges associated with our finite-lived intangible assets of $1.0 billion. The total estimated amortization charges for our finite-lived intangible assets for the three months ending December 31, 2015, and the years ending December 31, 2016, 2017, 2018, 2019 and 2020, are $348 million, $1.4 billion, $1.2 billion, $1.1 billion, $1.0 billion and $0.9 billion, respectively.

13


9. Financing arrangements
The carrying values and the fixed contractual coupon rates, as applicable, of our long-term borrowings were as follows (in millions):
 
September 30,
2015
 
December 31,
2014
2.30% notes due 2016 (2.30% 2016 Notes)
$
750

 
$
749

2.50% notes due 2016 (2.50% 2016 Notes)
1,000

 
1,000

Floating Rate Notes due 2017
600

 
600

1.25% notes due 2017 (1.25% 2017 Notes)
849

 
849

2.125% notes due 2017 (2.125% 2017 Notes)
1,249

 
1,249

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
2,100

 
4,375

4.375% euro-denominated notes due 2018 (4.375% 2018 euro Notes)
613

 
668

Floating Rate Notes due 2019
250

 
250

2.20% notes due 2019 (2.20% 2019 Notes)
1,398

 
1,398

5.70% notes due 2019 (5.70% 2019 Notes)
999

 
999

2.125% euro-denominated notes due 2019 (2.125% 2019 euro Notes)
752

 
814

4.50% notes due 2020 (4.50% 2020 Notes)
300

 
300

2.125% notes due 2020 (2.125% 2020 Notes)
749

 

3.45% notes due 2020 (3.45% 2020 Notes)
898

 
898

4.10% notes due 2021 (4.10% 2021 Notes)
998

 
998

3.875% notes due 2021 (3.875% 2021 Notes)
1,747

 
1,747

2.70% notes due 2022 (2.70% 2022 Notes)
499

 

3.625% notes due 2022 (3.625% 2022 Notes)
748

 
747

3.625% notes due 2024 (3.625% 2024 Notes)
1,398

 
1,398

3.125% notes due 2025 (3.125% 2025 Notes)
995

 

5.50% pound-sterling-denominated notes due 2026 (5.50% 2026 pound sterling Notes)
714

 
735

4.00% pound-sterling-denominated notes due 2029 (4.00% 2029 pound sterling Notes)
1,046

 
1,076

6.375% notes due 2037 (6.375% 2037 Notes)
899

 
899

6.90% notes due 2038 (6.90% 2038 Notes)
499

 
499

6.40% notes due 2039 (6.40% 2039 Notes)
996

 
996

5.75% notes due 2040 (5.75% 2040 Notes)
697

 
697

4.95% notes due 2041 (4.95% 2041 Notes)
596

 
596

5.15% notes due 2041 (5.15% 2041 Notes)
2,234

 
2,233

5.65% notes due 2042 (5.65% 2042 Notes)
1,245

 
1,245

5.375% notes due 2043 (5.375% 2043 Notes)
1,000

 
1,000

4.40% notes due 2045 (4.40% 2045 Notes)
1,243

 

Other notes
100

 
100

Total debt
31,761

 
30,715

Less current portion
(1,250
)
 
(500
)
Total noncurrent debt
$
30,511

 
$
30,215


14


Debt repayments
During the nine months ended September 30, 2015, we repaid $2.275 billion of principal on our Term Loan Credit Facility (Term Loan).
Debt issuances
In May 2015, we issued $3.5 billion aggregate principal amount of notes, consisting of the 2.125% 2020 Notes, the 2.70% 2022 Notes, the 3.125% 2025 Notes and the 4.40% 2045 Notes. The notes 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, except as discussed below, a make-whole amount, as defined. The 2.125% 2020 Notes, the 2.70% 2022 Notes, the 3.125% 2025 Notes and the 4.40% 2045 Notes may be redeemed without payment of a make-whole amount if they are redeemed on or after one, two, three or six months, respectively, prior to their maturity dates. In the event of a change in control triggering event, as defined, we may be required to purchase all or a portion of the notes at a price equal to 101% of the principal amount of the notes plus accrued and unpaid interest. Debt issuance costs incurred in connection with the issuance of these notes totaling approximately $21 million are being amortized over the respective lives of the notes, and the related charge is included in Interest expense, net in the Condensed Consolidated Statements of Income.
10. Stockholders’ equity
Stock repurchase program
Activity under our stock repurchase program was as follows (in millions):
 
2015
 
2014
 
Shares    
 
Dollars    
 
Shares    
 
Dollars    
First quarter
2.9

 
$
451

 

 
$

Second quarter
3.3

 
515

 

 

Third quarter
4.6

 
703

 

 

Total stock repurchases
10.8

 
$
1,669

 

 
$

As of September 30, 2015, $2.2 billion remained available under our stock repurchase program. 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.
Dividends
On December 17, 2014, March 4, 2015 and July 28, 2015, the Board of Directors declared quarterly cash dividends of $0.79 per share of common stock, which were paid on March 6, June 5, and September 8, 2015, respectively. On October 14, 2015, the Board of Directors declared a cash dividend of $0.79 per share of common stock, which will be paid on December 7, 2015, to all stockholders of record as of the close of business on November 16, 2015.

15


Accumulated other comprehensive income
The components of accumulated other comprehensive income (AOCI) were as follows (in millions):
 
Foreign
currency
translation
 
Cash flow
hedges
 
Available-for-sale
securities
 
Other
 
AOCI
Balance as of December 31, 2014
$
(264
)
 
$
290

 
$
(19
)
 
$
(15
)
 
$
(8
)
Foreign currency translation adjustments
(184
)
 

 

 

 
(184
)
Unrealized gains

 
168

 
188

 

 
356

Reclassification adjustments to income

 
114

 
35

 

 
149

Income taxes
11

 
(104
)
 
(83
)
 

 
(176
)
Balance as of March 31, 2015
$
(437
)
 
$
468

 
$
121

 
$
(15
)
 
$
137

Foreign currency translation adjustments
24

 

 

 

 
24

Unrealized gains (losses)

 
44

 
(180
)
 

 
(136
)
Reclassification adjustments to income

 
(226
)
 
9

 

 
(217
)
Income taxes
(6
)
 
67

 
63

 

 
124

Balance as of June 30, 2015
$
(419
)
 
$
353

 
$
13

 
$
(15
)
 
$
(68
)
Foreign currency translation adjustments
(88
)
 

 

 

 
(88
)
Unrealized (losses) gains

 
(65
)
 
(94
)
 
5

 
(154
)
Reclassification adjustments to income

 
(19
)
 
39

 

 
20

Income taxes
2

 
31

 
20

 

 
53

Balance as of September 30, 2015
$
(505
)
 
$
300

 
$
(22
)
 
$
(10
)
 
$
(237
)
The reclassifications out of AOCI to earnings were as follows (in millions):
 
 
Amounts reclassified out of AOCI
 
 
Components of AOCI
 
Three months ended September 30, 2015
 
Three months ended September 30, 2014
 
Line item affected in the Statements of Income
Cash flow hedges:
 
 
 
 
 
 
     Foreign currency contract gains
 
$
86

 
$
5

 
Product sales
     Cross-currency swap contract losses
 
(67
)
 
(179
)
 
Interest and other income, net
     Forward interest rate contract losses
 

 
(1
)
 
Interest expense, net
 
 
19

 
(175
)
 
Total before income tax
 
 
(7
)
 
64

 
Tax (expense)/benefit
 
 
$
12

 
$
(111
)
 
Net of taxes
Available-for-sale securities:
 
 
 

 

     Net realized losses
 
$
(39
)
 
$
(11
)
 
Interest and other income, net
 
 
15

 
4

 
Tax benefit
 
 
$
(24
)
 
$
(7
)
 
Net of taxes

16


 
 
Amounts reclassified out of AOCI
 
 
Components of AOCI
 
Nine months ended September 30, 2015
 
Nine months ended September 30, 2014
 
Line item affected in the Statements of Income
Cash flow hedges:
 
 
 
 
 
 
     Foreign currency contract gains
 
$
246

 
$
5

 
Product sales
     Cross-currency swap contract losses
 
(114
)
 
(117
)
 
Interest and other income, net
     Forward interest rate contract losses
 
(1
)
 
(1
)
 
Interest expense, net
 
 
131

 
(113
)
 
Total before income tax
 
 
(47
)
 
41

 
Tax (expense)/benefit
 
 
$
84

 
$
(72
)
 
Net of taxes
Available-for-sale securities:
 
 
 
 
 

     Net realized (losses) gains
 
$
(83
)
 
$
31

 
Interest and other income, net
 
 
31

 
(12
)
 
Tax benefit/(expense)
 
 
$
(52
)
 
$
19

 
Net of taxes

11. Fair value measurement
To estimate the fair values 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 the 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 the 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.

17


The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were 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 September 30, 2015, using:
 
 
 
 
Total
Assets:
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
4,291

 
$

 
$

 
$
4,291

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 

 
707

 

 
707

Foreign and other
 

 
1,689

 

 
1,689

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 

 
8,120

 

 
8,120

Industrial
 

 
8,054

 

 
8,054

Other
 

 
877

 

 
877

Residential mortgage-backed securities
 

 
1,516

 

 
1,516

Other mortgage- and asset-backed securities
 

 
2,217

 

 
2,217

Money market mutual funds
 
2,661

 

 

 
2,661

Other short-term interest-bearing securities
 

 
533

 

 
533

Equity securities
 
135

 

 

 
135

Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 

 
119

 

 
119

Interest rate swap contracts
 

 
160

 

 
160

Total assets
 
$
7,087

 
$
23,992

 
$

 
$
31,079

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
$

 
$
5

 
$

 
$
5

Cross-currency swap contracts
 

 
174

 

 
174

Contingent consideration obligations in connection with business combinations
 

 

 
197

 
197

Total liabilities
 
$

 
$
179

 
$
197

 
$
376


18


 
 
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, 2014, using:
 
 
 
 
Total
Assets:
 
 
 
 
 
 
 
 
Available-for-sale investments:
 
 
 
 
 
 
 
 
U.S. Treasury securities
 
$
3,646

 
$

 
$

 
$
3,646

Other government-related debt securities:
 
 
 
 
 
 
 
 
U.S.
 

 
528

 

 
528

Foreign and other
 

 
1,569

 

 
1,569

Corporate debt securities:
 
 
 
 
 
 
 
 
Financial
 

 
6,041

 

 
6,041

Industrial
 

 
6,351

 

 
6,351

Other
 

 
649

 

 
649

Residential mortgage-backed securities
 

 
1,702

 

 
1,702

Other mortgage- and asset-backed securities
 

 
1,796

 

 
1,796

Money market mutual funds
 
3,004

 

 

 
3,004

Other short-term interest-bearing securities
 

 
1,302

 

 
1,302

Equity securities
 
144

 

 

 
144

Derivatives:
 
 
 
 
 
 
 


Foreign currency contracts
 

 
360

 

 
360

Cross-currency swap contracts
 

 
32

 

 
32

Interest rate swap contracts
 

 
46

 

 
46

Total assets
 
$
6,794

 
$
20,376

 
$

 
$
27,170

 
 
 
 
 
 
 
 
 
Liabilities:
 
 
 
 
 
 
 
 
Derivatives:
 
 
 
 
 
 
 
 
Foreign currency contracts
 
$

 
$
4

 
$

 
$
4

Cross-currency swap contracts
 

 
12

 

 
12

Interest rate swap contracts
 

 
26

 

 
26

Contingent consideration obligations in connection with business combinations
 

 

 
215

 
215

Total liabilities
 
$