PFIZER INC, 10-Q filed on 5/10/2018
Quarterly Report
v3.8.0.1
Document and Entity Information - shares
 3 Months Ended
Apr. 01, 2018
May 07, 2018
Document and Entity Information [Abstract]    
Entity Registrant Name PFIZER INC  
Entity Central Index Key 0000078003  
Current Fiscal Year End Date --12-31  
Entity Filer Category Large Accelerated Filer  
Document Type 10-Q  
Document Period End Date Apr. 01, 2018  
Document Fiscal Year Focus 2018  
Document Fiscal Period Focus Q1  
Amendment Flag false  
Trading Symbol PFE  
Entity Common Stock, Shares Outstanding   5,849,571,048
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF INCOME - USD ($)
shares in Millions, $ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Income Statement [Abstract]    
Revenues [1] $ 12,906 $ 12,779
Costs and expenses:    
Cost of sales [1],[2] 2,563 2,468
Selling, informational and administrative expenses [1],[2] 3,412 3,315
Research and development expenses [1],[2] 1,743 1,716
Amortization of intangible assets [1] 1,196 1,186
Restructuring charges and certain acquisition-related costs [1] 43 84
Other (income)/deductions––net [1] (178) 60
Income from continuing operations before provision for taxes on income [1],[3] 4,127 3,951
Provision for taxes on income [1] 556 821
Income from continuing operations [1] 3,571 3,130
Discontinued operations––net of tax [1] (1) 0
Net income before allocation to noncontrolling interests [1],[4],[5] 3,570 3,130
Less: Net income attributable to noncontrolling interests [1] 9 9
Net income attributable to Pfizer Inc. [1] $ 3,561 $ 3,121
Earnings per common share––basic:    
Income from continuing operations attributable to Pfizer Inc. common shareholders (in dollars per share) [1] $ 0.60 $ 0.52
Discontinued operations––net of tax (in dollars per share) [1] 0.00 0.00
Net income attributable to Pfizer Inc. common shareholders (in dollars per share) [1] 0.60 0.52
Earnings per common share––diluted:    
Income from continuing operations attributable to Pfizer Inc. common shareholders (in dollars per share) [1] 0.59 0.51
Discontinued operations––net of tax (in dollars per share) [1] 0.00 0.00
Net income attributable to Pfizer Inc. common shareholders (in dollars per share) [1] $ 0.59 $ 0.51
Weighted-average shares––basic [1] 5,957 6,006
Weighted-average shares––diluted [1] 6,057 6,092
Cash dividends paid per common share (in dollars per share) [1] $ 0.34 $ 0.32
[1] Amounts may not add due to rounding.
[2] Excludes amortization of intangible assets, except as disclosed in Note 9A. Identifiable Intangible Assets and Goodwill: Identifiable Intangible Assets.
[3] Income from continuing operations before provision for taxes on income. IH’s earnings in the first quarter of 2018 and 2017 include dividend income of $59 million and $43 million, respectively, from our investment in ViiV. For additional information, see Note 4.
[4] Amounts may not add due to rounding.
[5] Amounts may not add due to rounding.
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Statement of Comprehensive Income [Abstract]    
Net income before allocation to noncontrolling interests [1],[2],[3] $ 3,570 $ 3,130
Foreign currency translation adjustments, net [2] 758 228
Reclassification adjustments [2] 15 0
Other comprehensive income (loss), foreign currency transaction and translation adjustment, before tax [2] 773 228
Unrealized holding losses on derivative financial instruments, net [2] (114) (9)
Reclassification adjustments for (gains)/losses included in net income [2],[4] 44 (241)
Other comprehensive income (loss), derivatives qualifying as hedges, before tax, total [2] (69) (251)
Unrealized holding gains on available-for-sale securities, net [2] 160 150
Reclassification adjustments for (gains)/losses included in net income [2],[4] (174) 137
Reclassification adjustments for unrealized gains included in Retained Earnings [2],[5] (462) 0
Other comprehensive income (loss), available-for-sale securities, before tax, total [2] (476) 287
Benefit plans: actuarial gains, net [2] 163 1
Reclassification adjustments related to amortization [2] 62 163
Reclassification adjustments related to settlements, net [2] 37 52
Other [2] (86) 45
Defined benefit plan, amounts recognized in other comprehensive income (loss), net gain (loss), before tax, total [2] 175 261
Benefit plans: prior service (costs)/credits and other, net [2] 0 0
Reclassification adjustments related to amortization [2] (46) (45)
Reclassification adjustments related to curtailments, net [2] (7) (7)
Other [2] 2 1
Defined benefit plan, amounts recognized in other comprehensive income (loss), net prior service cost, before tax [2] (51) (52)
Other comprehensive income, before tax [2] 352 474
Tax provision on other comprehensive (loss)/income [2] 432 25
Other comprehensive (loss)/income before allocation to noncontrolling interests [2] (80) 449
Comprehensive income before allocation to noncontrolling interests [2] 3,490 3,579
Less: Comprehensive income attributable to noncontrolling interests [2] 10 15
Comprehensive income attributable to Pfizer Inc. [2] $ 3,480 $ 3,563
[1] Amounts may not add due to rounding.
[2] Amounts may not add due to rounding.
[3] Amounts may not add due to rounding.
[4] Reclassified into Other (income)/deductions—net and Cost of sales in the condensed consolidated statements of income. For additional information on amounts reclassified into Cost of sales, see Note 7F. Financial Instruments: Derivative Financial Instruments and Hedging Activities.
[5] For additional information, see Note 1B. Basis of Presentation and Significant Accounting Policies: Adoption of New Accounting Standards.
v3.8.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Assets    
Cash and cash equivalents [1] $ 2,302 $ 1,342 [2]
Short-term investments [1] 9,119 18,650
Trade accounts receivable, less allowance for doubtful accounts: 2018—$597; 2017—$584 [1] 9,452 8,221
Inventories [1],[3] 8,148 7,578
Current tax assets [1] 3,624 3,050
Other current assets [1] 2,126 2,289
Assets held for sale [1] 64 12
Total current assets [1] 34,835 41,141
Long-term investments [1] 6,945 7,015
Property, plant and equipment, less accumulated depreciation: 2018—$16,665; 2017—$16,172 [1] 13,971 13,865
Identifiable intangible assets, less accumulated amortization [1],[4] 47,690 48,741
Goodwill [1] 56,393 55,952
Noncurrent deferred tax assets and other noncurrent tax assets [1] 1,883 1,855
Other noncurrent assets [1] 2,896 3,227
Total assets [1] 164,612 171,797
Liabilities and Equity    
Short-term borrowings, including current portion of long-term debt: 2018—$4,763; 2017—$3,546 [1] 9,010 9,953
Trade accounts payable [1] 3,879 4,656
Dividends payable [1] 0 2,029
Income taxes payable [1] 1,614 477
Accrued compensation and related items [1] 1,911 2,196
Other current liabilities [1] 10,950 11,115
Total current liabilities [1] 27,365 30,427
Long-term debt [1] 31,831 33,538
Pension benefit obligations, net [1] 5,171 5,926
Postretirement benefit obligations, net [1] 1,488 1,504
Noncurrent deferred tax liabilities [1] 5,967 3,900
Other taxes payable [1] 16,605 18,697
Other noncurrent liabilities [1] 5,644 6,149
Total liabilities [1] 94,071 100,141
Commitments and Contingencies [1]
Preferred stock [1] 21 21
Common stock [1] 465 464
Additional paid-in capital [1] 84,599 84,278
Treasury stock [1] (95,460) (89,425)
Retained earnings [1] 89,961 85,291
Accumulated other comprehensive loss [1] (9,402) (9,321)
Total Pfizer Inc. shareholders’ equity [1] 70,184 71,308
Equity attributable to noncontrolling interests [1] 358 348
Total equity [1] 70,541 71,656
Total liabilities and equity [1] $ 164,612 $ 171,797
[1] Amounts may not add due to rounding.
[2] Amounts may not add due to rounding.
[3] The change from December 31, 2017 reflects increases for certain products to meet targeted levels in the normal course of business, including supply recovery and inventory build for new product launches, as well as an increase due to foreign exchange.
[4] The decrease in Identifiable intangible assets, less accumulated amortization, is primarily due to amortization, partially offset by an increase due to foreign exchange.Our identifiable intangible assets are associated with the following, as a percentage of total identifiable intangible assets, less accumulated amortization: April 1, 2018 IH EH WRDDeveloped technology rights 68% 32% —%Brands, finite-lived 75% 25% —%Brands, indefinite-lived 71% 29% —%IPR&D 82% 11% 7%
v3.8.0.1
CONDENSED CONSOLIDATED BALANCE SHEETS (PARENTHETICAL) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Statement of Financial Position [Abstract]    
Allowance for doubtful accounts [1] $ 597 $ 584
Property, plant and equipment, accumulated depreciation [1] 16,665 16,172
Current portion of long-term debt [1] $ 4,763 $ 3,546
[1] Amounts may not add due to rounding.
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Operating Activities    
Net income before allocation to noncontrolling interests [1],[2],[3] $ 3,570 $ 3,130
Adjustments to reconcile net income before allocation to noncontrolling interests to net cash provided by operating activities:    
Depreciation and amortization [1] 1,567 1,555
Asset write-offs and impairments [1] 7 35
Loss on sale of HIS net assets [1],[4] 3 37
TCJA impact [1],[5] (68) 0
Deferred taxes from continuing operations [1] 294 38
Share-based compensation expense [1] 182 218
Benefit plan contributions in excess of expense [1] (692) (986)
Other adjustments, net [1] (164) (225)
Other changes in assets and liabilities, net of acquisitions and divestitures [1] (2,715) (2,217)
Net cash provided by operating activities [1] 1,983 1,584
Investing Activities    
Purchases of property, plant and equipment [1] (386) (358)
Purchases of short-term investments [1] (913) (701)
Proceeds from redemptions/sales of short-term investments [1] 6,463 2,232
Net proceeds from redemptions/sales of short-term investments with original maturities of three months or less [1] 4,507 3,778
Purchases of long-term investments [1] (605) (740)
Proceeds from redemptions/sales of long-term investments [1] 576 844
Acquisitions of businesses, net of cash acquired [1] 0 (585)
Other investing activities, net [1] 25 297
Net cash provided by investing activities [1] 9,667 4,768
Financing Activities    
Proceeds from short-term borrowings [1] 428 2,554
Principal payments on short-term borrowings [1] (2,493) (2,519)
Net payments on short-term borrowings with original maturities of three months or less [1] (83) (2,110)
Proceeds from issuance of long-term debt [1] 0 5,273
Principal payments on long-term debt [1] (355) (1,253)
Purchases of common stock [1] (6,063) (5,000)
Cash dividends paid [1] (2,032) (1,945)
Proceeds from exercise of stock options [1] 372 313
Other financing activities, net [1] (495) (220)
Net cash used in financing activities [1] (10,720) (4,907)
Effect of exchange-rate changes on cash and cash equivalents and restricted cash and cash equivalents [1] 55 21
Net increase in cash and cash equivalents and restricted cash and cash equivalents [1] 985 1,465
Cash and cash equivalents, and restricted cash and cash equivalents, beginning [1] 1,431 2,666
Cash and cash equivalents and restricted cash and cash equivalents, end [1] 2,416 4,131
Non-cash transactions:    
Receipt of ICU Medical common stock [1],[6] 0 428
Promissory note from ICU Medical [1],[6] 0 75
Cash paid during the period for:    
Income taxes [1] 257 195
Interest [1] 259 216
Interest rate hedges [1] $ 20 $ 32
[1] Amounts may not add due to rounding.
[2] Amounts may not add due to rounding.
[3] Amounts may not add due to rounding.
[4] In the first quarter of 2018 and 2017, represents an incremental charge to amounts previously recorded in 2016 to write down the HIS net assets to fair value less costs to sell related to the sale of HIS net assets to ICU Medical on February 3, 2017. For additional information, see Note 2B.
[5] As a result of the enactment of the TCJA in December 2017, Pfizer’s 2018 Provision for taxes on income was favorably impacted by approximately $68 million, primarily related to certain tax initiatives associated with the lower U.S. tax rate as a result of the TCJA.
[6] In connection with the sale of the HIS net assets to ICU Medical, on February 3, 2017, Pfizer received 3.2 million newly issued shares of ICU Medical common stock initially valued at $428 million and a promissory note in the amount of $75 million, which was repaid in full as of December 31, 2017. For additional information, see Note 2B. Acquisition, Sale of Hospira Infusion Systems Net Assets, Licensing Arrangement and Collaborative Arrangements: Sale of Hospira Infusion Systems Net Assets to ICU Medical, Inc. (EH).
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (PARENTHETICAL) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Feb. 03, 2017
TCJA impact [1],[2] $ 68 $ 0  
Disposed of by Sale [Member] | ICU Medical [Member] | HIS [Member]      
Number of shares received in disposition     3.2
Value of shares received from disposition     $ 428
Promissory note     $ 75
[1] Amounts may not add due to rounding.
[2] As a result of the enactment of the TCJA in December 2017, Pfizer’s 2018 Provision for taxes on income was favorably impacted by approximately $68 million, primarily related to certain tax initiatives associated with the lower U.S. tax rate as a result of the TCJA.
v3.8.0.1
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (RESTRICTED CASH PARENTHETICAL) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Cash and cash equivalents [1] $ 2,302 $ 1,342 [2]
Total cash and cash equivalents and restricted cash and cash equivalents shown in the condensed consolidated balance sheets [2] 2,416 1,431
Short-term Investments [Member]    
Restricted cash and cash equivalents 41 0
Long-term Investments [Member]    
Restricted cash and cash equivalents 73 0
Other Current Assets [Member]    
Restricted cash and cash equivalents 0 14
Other Noncurrent Assets [Member]    
Restricted cash and cash equivalents $ 0 $ 75
[1] Amounts may not add due to rounding.
[2] Amounts may not add due to rounding.
v3.8.0.1
Basis of Presentation and Significant Accounting Policies
 3 Months Ended
Apr. 01, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Significant Accounting Policies
Basis of Presentation and Significant Accounting Policies

A. Basis of Presentation

See the Glossary of Defined Terms at the beginning of this Quarterly Report on Form 10-Q for terms used throughout the condensed consolidated financial statements and related notes of this Quarterly Report on Form 10-Q.

We prepared the condensed consolidated financial statements following the requirements of the SEC for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted.

The financial information included in our condensed consolidated financial statements for subsidiaries operating outside the U.S. is as of and for the three months ended February 25, 2018 and February 26, 2017. The financial information included in our condensed consolidated financial statements for U.S. subsidiaries is as of and for the three months ended April 1, 2018 and April 2, 2017.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year.

We are responsible for the unaudited financial statements included in this Quarterly Report on Form 10-Q. The interim financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of our condensed consolidated balance sheets and condensed consolidated statements of income. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our 2017 Form 10-K.

We manage our commercial operations through two distinct business segments: Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). For additional information, see Note 13 and Notes to Consolidated Financial Statements––Note 18. Segment, Geographic and Other Revenue Information in Pfizer’s 2017 Financial Report.

Certain amounts in the condensed consolidated financial statements and associated notes may not add due to rounding. All percentages have been calculated using unrounded amounts.

In the first quarter of 2018, as of January 1, 2018, we adopted eleven new accounting standards. See Note 1B for further information.

Our recent significant business development activities include:
•
On February 3, 2017, we completed the sale of our global infusion systems net assets, HIS, to ICU Medical. The operating results of HIS are included in our condensed consolidated statement of income and EH’s operating results through February 2, 2017 and, therefore, our financial results, and EH’s operating results, for the first quarter of 2017 reflect approximately one month of HIS domestic operations and approximately two months of HIS international operations, while our financial results, and EH’s operating results, for the first quarter of 2018 do not reflect any contribution from HIS global operations.
•
On December 22, 2016, which fell in the first fiscal quarter of 2017 for our international operations, we acquired the development and commercialization rights to AstraZeneca’s small molecule anti-infectives business, primarily outside the U.S. Commencing from the acquisition date, our financial statements reflect the assets, liabilities, operating results and cash flows of this business, and, in accordance with our international reporting period, our financial results, EH’s operating results, and cash flows for the first quarter of 2017 reflect approximately two months of the small molecule anti-infectives business acquired from AstraZeneca and our financial results, EH’s operating results, and cash flows for the first quarter of 2018 reflect three months of the small molecule anti-infective business acquired from AstraZeneca.
For additional information, see Note 2 and Notes to Consolidated Financial Statements––Note 2. Acquisitions, Sale of Hospira Infusion Systems Net Assets, Research and Development and Collaborative Arrangements, Equity-Method Investments and Cost-Method Investment in Pfizer’s 2017 Financial Report.
B. Adoption of New Accounting Standards
On January 1, 2018, we adopted eleven new accounting standards. The quantitative impacts on our prior period condensed consolidated financial statements of adopting the following new standards are summarized in the tables within the section titled Impacts to our Condensed Consolidated Financial Statements, further below.
Revenues––We adopted a new accounting standard for revenue recognition and changed our revenue recognition policies accordingly. Generally, the previous revenue recognition standards permitted recognition when persuasive evidence of a contract existed, delivery had occurred, and the seller's price to the buyer was fixed or determinable. Under the new standard, revenue is recognized upon transfer of control of the product to our customer in an amount that reflects the consideration we expect to receive in exchange. We adopted the new accounting standard utilizing the modified retrospective method, and, therefore, no adjustments were made to amounts in our prior period financial statements. We recorded the cumulative effect of adopting the standard as an adjustment to increase the opening balance of Retained earnings by $584 million on a pre-tax basis ($450 million after-tax). This amount includes $500 million (pre-tax) related to the timing of recognizing Other (income)/deductions––net primarily for upfront and milestone payments on our collaboration arrangements ($394 million, pre-tax) and, to a lesser extent, product rights and out-licensing arrangements, and $84 million (pre-tax) related to the timing of recognizing Revenues and Cost of sales on product shipments. The impact of adoption did not have a material impact to our condensed consolidated statement of income for the three months ended April 1, 2018 or our condensed consolidated balance sheet as of April 1, 2018. For additional information, see Note 1C.
Financial Assets and Liabilities––The new accounting standard related to the recognition and measurement of financial assets and liabilities makes the following changes to prior guidance and requires:
•
certain equity investments to be measured at fair value with changes in fair value now recognized in net income. However, equity investments that do not have readily determinable fair values may be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer;
•
a qualitative assessment of equity investments without readily determinable fair values to identify impairment; and
•
separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements.
We adopted the new accounting standard utilizing the modified retrospective method, and, therefore, no adjustments were made to amounts in our prior period financial statements. We recorded the cumulative effect of adopting the standard as an adjustment to increase the opening balance of Retained earnings by $462 million on a pre-tax basis ($419 million after-tax) related to the net impact of unrealized gains and losses primarily on available-for-sale equity securities, restricted stock and private equity securities. In the first quarter of 2018, we recorded net unrealized gains on equity securities of $111 million. For additional information, see Note 4 and Note 7.

Presentation of Net Periodic Pension and Postretirement Benefit Cost––We adopted a new accounting standard that requires the net periodic pension and postretirement benefit costs other than the service costs be presented in Other (income)/deductions––net, and that the presentation be applied retrospectively. We adopted the presentation of the net periodic benefit costs other than service costs by reclassifying these costs from Cost of sales, Selling, informational and administrative expenses, Research and development expenses and Restructuring charges and certain acquisition-related costs to Other (income)/deductions––net. We elected to apply the practical expedient as it is impracticable to determine the disaggregation of the cost components for amounts capitalized within Inventories and property, plant and equipment and amortized in each of those periods. We have therefore reclassified the prior period net periodic benefit costs/(credits) disclosed in Note 10 to apply the retrospective presentation for comparative periods.
As of January 1, 2018, only service costs will be included in amounts capitalized in Inventories or property, plant and equipment, while the other components of net periodic benefit costs will be included in Other (income)/deductions––net. For additional information, see Note 4 and Note 10.
Income Tax Accounting––The new guidance removes the prohibition against recognizing current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to a third party, unless the asset transferred is inventory. We adopted the standard utilizing the modified retrospective method, and, therefore, no adjustments were made to amounts in our prior period financial statements. We recorded the cumulative effect of adopting the standard as an adjustment to decrease the opening balance of Retained earnings by $189 million.
Accounting for Hedging Activities––The standard makes the following changes:
•
Permits hedge accounting for risk components in hedging relationships involving nonfinancial risk and interest rate risk;
•
Changes the guidance for designating fair value hedges of interest rate risk and for measuring the change in fair value of the hedged item in fair value hedges of interest rate risk;
•
No longer requires the separate measurement and reporting of hedge ineffectiveness, but requires the income statement presentation of the earnings effect of the hedging instrument with the earnings effect of the hedged item;
•
Permits us to exclude the portion of the change in fair value of a currency swap that is attributable to a cross-currency basis spread from the assessment of hedge effectiveness; and
•
Simplifies hedge effectiveness testing.
We early adopted the new accounting standard on January 1, 2018 on a prospective basis. In the first quarter of 2018, we recorded income of $29 million in Other (income)/deductions––net, whereas this item would have been classified in interest income in prior periods. For additional information, see Note 7F.
Reclassification of Certain Tax Effects from AOCI––We early adopted a new accounting standard that provides guidance on the reclassification of certain tax effects from AOCI. Under the new guidance, we elected to reclassify the stranded tax amounts related to the TCJA from AOCI to Retained earnings. We adopted the new accounting standard utilizing the modified retrospective method, and recorded the cumulative effect of adopting the standard as an adjustment to increase the opening balance of Retained earnings by $495 million, primarily due to the effect of the change in the U.S. Federal corporate tax rate. The impact on other stranded tax amounts related to the application of the TCJA was not material to our condensed consolidated financial statements.
Classification of Certain Transactions in the Statement of Cash Flows––We retrospectively adopted an accounting standard that changed the presentation of certain information in the condensed consolidated statements of cash flows, including the classification of:
•
debt prepayment and extinguishment costs, resulting in an increase in Operating activities––Other adjustments, net and a decrease in Financing activities––Other financing activities, net of $5 million for the three months ended April 1, 2018; and
•
accreted interest on the settlement of commercial paper debt instruments, resulting in a decrease in Operating activities––Other adjustments, net, and an increase in Financing activities––Other financing activities, net of $24 million for the three months ended April 1, 2018.
The new standard also establishes guidance on the classification of certain cash flows related to contingent consideration in a business acquisition. Cash payments made soon after a business acquisition date will be classified as Investing activities, while payments made thereafter will be classified as Financing activities. Payments made in excess of the amount of the original contingent consideration liability will be classified as Operating activities. The adoption of this guidance will not have a material impact to our condensed consolidated financial statements.
Presentation of Restricted Cash in the Statement of Cash Flows––We adopted, on a retrospective basis, the new accounting standard, which requires that Restricted cash and restricted cash equivalents be included with Cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the consolidated statements of cash flows. As a result, for the three months ended April 1, 2018, $25 million is presented as an increase in Cash, cash equivalents, restricted cash and restricted cash equivalents.
Definition of a Business––We prospectively adopted the standard for determining whether business development transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, the transaction will not qualify for treatment as a business. To be considered a business, a set of integrated activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs, without regard as to whether a purchaser could replace missing elements. In addition, the definition of the term “output” has been narrowed to make it consistent with the updated revenue recognition guidance. In the first quarter of 2018, there was no impact to our condensed consolidated financial statements from the adoption of this new standard.
Derecognition of Nonfinancial Assets––We prospectively adopted the standard, which applies to the full or partial sale or transfer of nonfinancial assets, including intangible assets, real estate and inventory. The standard provides that the gain or loss is determined by the difference between the consideration received and the carrying value of the asset. In the first quarter of 2018, there was no impact to our condensed consolidated financial statements from the adoption of this new standard.
Accounting for Modifications of Share-Based Payment Awards––We prospectively adopted the standard, which clarifies that certain changes in the terms or conditions of a share-based payment award be accounted for as a modification. There was no impact to our condensed consolidated financial statements from the adoption of this new standard.
Impacts to our Condensed Consolidated Financial Statements––The impacts on our prior period condensed consolidated financial statements of adopting the new standards described above are summarized in the following tables:
Adoption of the standard related to pension and postretirement benefit costs impacted our prior period condensed consolidated statement of income as follows:
 
 
Three months ended April 2, 2017
(MILLIONS OF DOLLARS)
 
As Previously Reported

 
Effect of Change
Higher/(Lower)

 
As Restated

Cost of sales
 
$
2,470

 
$
(3
)
 
$
2,468

Selling, informational and administrative expenses
 
3,308

 
7

 
3,315

Research and development expenses
 
1,708

 
8

 
1,716

Restructuring charges and certain acquisition-related costs
 
157

 
(74
)
 
84

Other (income)/deductions––net
 
(1
)
 
62

 
60

Income from continuing operations before provision for taxes on income
 
3,951

 
—

 
3,951

Adoption of the standards impacted our condensed consolidated balance sheet as follows:
 
 
 
 
Effect of New Accounting Standards Higher/(Lower)

 
 
(MILLIONS OF DOLLARS)
 
As Previously Reported Balance at December 31, 2017

 
Revenues

 
Financial Assets and Liabilities

 
Income
Tax Accounting

 
Reclassification of Certain Tax Effects from AOCI

 
Balance at January 1, 2018

Trade accounts receivable
 
$
8,221

 
$
13

 
$
—

 
$
—

 
$
—

 
$
8,234

Inventories
 
7,578

 
(11
)
 
—

 
—

 
—

 
7,567

Current tax assets
 
3,050

 
(11
)
 
—

 
(3
)
 
—

 
3,036

Noncurrent deferred tax assets and other noncurrent tax assets
 
1,855

 
(17
)
 
—

 
—

 
—

 
1,838

Other noncurrent assets
 
3,227

 
—

 
—

 
(204
)
 
—

 
3,023

Other current liabilities
 
11,115

 
(123
)
 
—

 
—

 
—

 
10,992

Noncurrent deferred tax liabilities
 
3,900

 
106

 
—

 
(18
)
 
—

 
3,988

Other noncurrent liabilities
 
6,149

 
(459
)
 
—

 
—

 
—

 
5,690

Retained earnings
 
85,291

 
450

 
419

 
(189
)
 
495

 
86,466

Accumulated other comprehensive loss
 
(9,321
)
 
—

 
(419
)
 
—

 
(495
)
 
(10,235
)
Adoption of the standards related to the classification of certain transactions in the statement of cash flows and the presentation of restricted cash in the statement of cash flows impacted our condensed consolidated statement of cash flows as follows:
 
 
Three months ended April 2, 2017
 
 
 
 
Effect of New Accounting Standards Inflow/(Outflow)
 
 
(MILLIONS OF DOLLARS)
 
As Previously Reported

 
Cash Flow Classification

 
Restricted Cash

 
As Restated

Operating Activities
 
 
 
 
 
 
 
 
Other adjustments, net
 
$
(211
)
 
(14
)
 
$
—

 
$
(225
)
Other changes in assets and liabilities, net of acquisitions and divestitures
 
(2,225
)
 
—

 
8

 
(2,217
)
Investing Activities
 
 
 
 
 
 
 
 
Proceeds from redemptions and sales of short-term investments
 
2,235

 
—

 
(3
)
 
2,232

Proceeds from redemptions/sales of long-term investments
 
846

 
—

 
(2
)
 
844

Financing Activities
 
 
 
 
 
 
 
 
Principal payments on short-term borrowings
 
(2,530
)
 
11

 
—

 
(2,519
)
Net proceeds from/(payments on) short-term borrowings with original maturities of three months or less
 
(2,113
)
 
3

 
—

 
(2,110
)
Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents
 
1,461

 
—

 
4

 
1,465

Cash and cash equivalents and restricted cash and cash equivalents, beginning
 
2,595

 
—

 
70

 
2,666

Cash and cash equivalents and restricted cash and cash equivalents, ending
 
4,057

 
—

 
74

 
4,131



C. Revenues

On January 1, 2018, we adopted a new accounting standard for revenue recognition. For further information, see Note 1B.
We recorded direct product and/or alliance revenues of more than $1 billion for each of nine products in 2017. These direct products sales and/or alliance product revenues represented 46% of our revenues in 2017. The loss or expiration of intellectual property rights can have a significant adverse effect on our revenues as our contracts with customers will generally be at lower selling prices due to added competition and we generally provide for higher sales returns during the period in which individual markets begin to near the loss or expiration of intellectual property rights. Our Consumer Healthcare business includes OTC brands with a focus on dietary supplements, pain management, gastrointestinal and respiratory and personal care. According to Euromonitor International’s retail sales data, in 2017, our Consumer Healthcare business was the fifth-largest branded multi-national, OTC consumer healthcare business in the world and produced two of the ten largest selling consumer healthcare brands (Centrum and Advil) in the world. We sell biopharmaceutical products after patent expiration, and under patent, and, to a much lesser extent, consumer healthcare products worldwide to developed and emerging market countries.
Revenue Recognition––We record revenues from product sales when there is a transfer of control of the product from us to the customer. We determine transfer of control based on when the product is shipped or delivered and title passes to the customer.
•
Customers––Our biopharmaceutical products are sold principally to wholesalers but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies, and, in the case of our vaccine products in the U.S., we primarily sell directly to the CDC, wholesalers and individual provider offices. Our consumer healthcare customers include retailers and, to a lesser extent, wholesalers and distributors.
Biopharmaceutical products that ultimately are used by patients are generally covered under governmental programs, managed care programs, insurance programs, including those managed through pharmacy benefit managers, and are subject to sales allowances and/or rebates payable directly to those programs. Those sales allowances and rebates are generally negotiated, but government programs may have legislated amounts by type of product (e.g., patented or unpatented).
•
Our Sales Contracts––Sales on credit are typically under short-term contracts. Collections are based on market payment cycles common in various markets, with shorter cycles in the U.S. Sales are adjusted for sales allowances, chargebacks, rebates and sales returns and cash discounts. Sales returns occur due to loss of exclusivity, product recalls or a changing competitive environment.
•
Deductions from Revenues––Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment is required when estimating the impact of these revenue deductions on gross sales for a reporting period.
Specifically:
•
In the U.S., we sell our products to distributors and hospitals under our sales contracts. However, we also have contracts with managed care or pharmacy benefit managers and legislatively mandated contracts with the federal and state governments under which we provide rebates to them based on medicines utilized by the lives they cover. We record provisions for Medicare, Medicaid, and performance-based contract pharmaceutical rebates based upon our experience ratio of rebates paid and actual prescriptions written during prior quarters. We apply the experience ratio to the respective period’s sales to determine the rebate accrual and related expense. This experience ratio is evaluated regularly to ensure that the historical trends are as current as practicable. We estimate discounts on branded prescription drug sales to Medicare Part D participants in the Medicare “coverage gap,” also known as the “doughnut hole,” based on the historical experience of beneficiary prescriptions and consideration of the utilization that is expected to result from the discount in the coverage gap. We evaluate this estimate regularly to ensure that the historical trends and future expectations are as current as practicable. For performance-based contract rebates, we also consider current contract terms, such as changes in formulary status and rebate rates.
•
Outside the U.S., the majority of our pharmaceutical sales allowances are contractual or legislatively mandated and our estimates are based on actual invoiced sales within each period, which reduces the risk of variations in the estimation process. In certain European countries, rebates are calculated on the government’s total unbudgeted pharmaceutical spending or on specific product sales thresholds and we apply an estimated allocation factor against our actual invoiced sales to project the expected level of reimbursement. We obtain third-party information that helps us to monitor the adequacy of these accruals.
•
Provisions for pharmaceutical chargebacks (primarily reimbursements to U.S. wholesalers for honoring contracted prices to third parties) closely approximate actual as we settle these deductions generally within two to five weeks of incurring the liability.
•
Provisions for pharmaceutical sales returns are based on a calculation for each market that incorporates the following, as appropriate: local returns policies and practices; historical returns as a percentage of sales; an understanding of the reasons for past returns; estimated shelf life by product; an estimate of the amount of time between shipment and return or lag time; and any other factors that could impact the estimate of future returns, such as loss of exclusivity, product recalls or a changing competitive environment. Generally, returned products are destroyed, and customers are refunded the sales price in the form of a credit.
•
We record sales incentives as a reduction of revenues at the time the related revenues are recorded or when the incentive is offered, whichever is later. We estimate the cost of our sales incentives based on our historical experience with similar incentives programs to predict customer behavior.
Our accruals for Medicare rebates, Medicaid and related state program rebates, performance-based contract rebates, chargebacks, sales allowances and sales returns and cash discounts totaled $5.4 billion and $4.9 billion as of April 1, 2018 and December 31, 2017, respectively.
The following table provides information about the balance sheet classification of these accruals:
(MILLIONS OF DOLLARS)
 
April 1, 2018

 
December 31, 2017

Reserve against Trade accounts receivable, less allowance for doubtful accounts
 
$
1,363

 
$
1,352

 
 
 
 
 
Other current liabilities:
 
 
 
 
Accrued rebates
 
2,932

 
2,674

Other accruals
 
725

 
512

 
 
 
 
 
Other noncurrent liabilities
 
372

 
385

Total accrued rebates and other accruals
 
$
5,392

 
$
4,923


Amounts recorded for revenue deductions can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. On a quarterly basis, our adjustments of estimates to reflect actual results generally have been less than 1% of revenues, and have resulted in either a net increase or a net decrease in Revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product growth trends.

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenues.
D. Collaborative Arrangements
Payments to and from our collaboration partners are presented in our condensed consolidated statements of income based on the nature of the arrangement (including its contractual terms), the nature of the payments and applicable accounting guidance. Under co-promotion agreements, we record the amounts received from our collaboration partners as alliance revenues, a component of Revenues, when our collaboration partners are the principal in the transaction and we receive a share of their net sales or profits. Alliance revenues are recorded as we perform co-promotion services for the collaboration and the collaboration partners sell the products to their customers within the applicable period. The related expenses for selling and marketing these products are included in Selling, informational and administrative expenses. In collaborative arrangements where we manufacture a product for our collaboration partners, we record revenues when we transfer control of the product to our collaboration partners. All royalty payments to collaboration partners are included in Cost of sales. Royalty payments received from collaboration partners are included in Other (income)/deductions—net.
Reimbursements to or from our collaboration partners for development costs are recorded net in Research and development expenses. Upfront payments and pre-approval milestone payments due from us to our collaboration partners in development stage collaborations are recorded as Research and development expenses. Milestone payments due from us to our collaboration partners after regulatory approval has been attained for a medicine are recorded in Identifiable intangible assets—Developed technology rights. Upfront and pre-approval milestone payments earned from our collaboration partners by us are recognized in Other (income)/deductions—net over the development period for the collaboration products, when our performance obligations include providing R&D services to our collaboration partners. Upfront, pre-approval and post-approval milestone payments earned by us may be recognized in Other (income)/deductions—net immediately when earned or over other periods depending upon the nature of our performance obligations in the applicable collaboration. Where the milestone event is regulatory approval for a medicine, we generally recognize milestone payments due to us in the transaction price when regulatory approval in the applicable jurisdiction has been attained. We may recognize milestone payments due to us in the transaction price earlier than the milestone event in certain circumstances when recognition of the income would not be probable of a significant reversal.
On January 1, 2018, we adopted a new accounting standard on revenue recognition (see Note 1B). As a result of the adoption, we recognized the following cumulative effect adjustments related to collaboration arrangements to Retained earnings:
•
$394 million (pre-tax) for collaborative arrangements where the period over which upfront, pre-approval and regulatory approval milestone payments received from our collaboration partners are recognized in Other (income)/deductions—net over a reduced period. Under the new standard, the income from upfront and pre-approval milestone payments due to us is typically recognized over the development period for the collaboration when our performance obligation, in addition to granting a license, is to provide research and development services to our collaboration partners, and major regulatory approval milestones are typically recognized immediately when earned as the related development period has ended. The income from upfront and milestone payments is typically recognized immediately as earned if our performance obligation, in addition to granting a license, is only for commercialization activities. Under the old standard, this income was recognized over the combined development and estimated commercialization (including co-promotion) period for the collaboration products.
•
$82 million (pre-tax) for collaborative arrangements where we manufacture products for our collaboration partners and recognize Revenues and Cost of sales for product shipments at an earlier point in time. Under the new standard, revenue is recognized when we transfer control of the products to our collaboration partners. Under the old standard, revenue was recognized when our collaboration partners sell the products and transfer title to their third party customers.
v3.8.0.1
Acquisition, Sale of Hospira Infusion Systems Net Assets, Licensing Arrangement and Collaborative Arrangements
 3 Months Ended
Apr. 01, 2018
Business Combinations, Discontinued Operations And Disposal Groups, Collaborative Arrangements And Equity Method Investments [Abstract]  
Acquisition, Sale of Hospira Infusion Systems Net Assets, Licensing Arrangement and Collaborative Arrangements
Acquisition, Sale of Hospira Infusion Systems Net Assets, Licensing Arrangement and Collaborative Arrangements

A. Acquisition
AstraZeneca’s Small Molecule Anti-Infectives Business (EH)
On December 22, 2016, which fell in the first fiscal quarter of 2017 for our international operations, we acquired the development and commercialization rights to AstraZeneca’s small molecule anti-infectives business, primarily outside the U.S., including the commercialization and development rights to the approved EU drug Zavicefta™ (ceftazidime-avibactam), the marketed agents Merrem™/Meronem™ (meropenem) and Zinforo™ (ceftaroline fosamil), and the clinical development assets ATM-AVI and CXL (ceftaroline fosamil-AVI). Under the terms of the agreement, we made an upfront payment of approximately $552 million to AstraZeneca upon the close of the transaction and an additional $3 million payment for a contractual purchase price adjustment in the second quarter of 2017. We also made a $50 million milestone payment in the second quarter of 2017, we made an additional milestone payment of $125 million in our first fiscal quarter of 2018 and we will make a deferred payment of $175 million to AstraZeneca in January 2019. In addition, AstraZeneca may be eligible to receive an additional milestone payment of $75 million if the related milestone is achieved prior to December 31, 2021, and up to $600 million if sales of Zavicefta™ exceed certain thresholds prior to January 1, 2026, as well as tiered royalties on sales of Zavicefta™ and ATM-AVI in certain markets for a period ending on the later of 10 years from first commercial sale or the loss of patent protection or loss of regulatory exclusivity. The total royalty payments are unlimited during the royalty term and the undiscounted payments are expected to be in the range of approximately $250 million to $430 million. The total fair value of consideration transferred for AstraZeneca’s small molecule anti-infectives business was approximately $1,040 million, which includes $555 million in cash, plus the fair value of contingent consideration of $485 million (which is composed of the deferred payment, the $50 million milestone payment made in the second quarter of 2017, the $125 million milestone payment made in our first fiscal quarter of 2018 and the future expected milestone and royalty payments). In connection with this acquisition, we recorded $894 million in Identifiable intangible assets, consisting of $728 million in Developed technology rights and $166 million in IPR&D. We also recorded $92 million in Other current assets related to the economic value of inventory which was retained by AstraZeneca for sale on our behalf, $73 million in Goodwill and $19 million of net deferred tax liabilities. The final allocation of the consideration transferred to the assets acquired and the liabilities assumed has been completed.

B. Sale of Hospira Infusion Systems Net Assets to ICU Medical, Inc. (EH)

On October 6, 2016, we announced that we entered into a definitive agreement under which ICU Medical agreed to acquire all of our global infusion systems net assets, HIS, for approximately $1 billion in cash and ICU Medical common stock. HIS includes IV pumps, solutions, and devices. As a result of the performance of HIS relative to ICU Medical’s expectations, on January 5, 2017, we entered into a revised agreement with ICU Medical under which ICU Medical would acquire HIS for up to approximately $900 million, composed of cash and contingent cash consideration, ICU Medical common stock and seller financing.
The revised transaction closed on February 3, 2017. At closing, under the terms of the revised agreement, we received 3.2 million newly issued shares of ICU Medical common stock (as originally agreed), which we initially valued at approximately $428 million (based upon the closing price of ICU Medical common stock on the closing date less a discount for lack of marketability) and which are reported as equity securities at fair value in Long-term investments on the condensed consolidated balance sheets as of April 1, 2018 and December 31, 2017, a promissory note in the amount of $75 million, which was repaid in full as of December 31, 2017, and net cash of approximately $200 million before customary adjustments for net working capital, which is reported in Other investing activities, net on the condensed consolidated statement of cash flows for the three months ended April 2, 2017. In addition, we are entitled to receive a contingent amount of up to an additional $225 million in cash based on ICU Medical’s achievement of certain cumulative performance targets for the combined company through December 31, 2019. After receipt of the ICU Medical shares, we own approximately 16% of ICU Medical. We have agreed to certain restrictions on transfer of our ICU Medical shares for 18 months after the closing date. We recognized pre-tax losses of approximately $3 million in the first quarter of 2018 in Other (income)/deductions––net, and pre-tax losses of approximately $37 million in the first quarter of 2017 upon the closing of the transaction in February 2017 in Other (income)/deductions––net, representing adjustments to amounts previously recorded in 2016 to write down the HIS net assets to fair value less costs to sell. For additional information, see Note 4 and Notes to Consolidated Financial Statements––Note 2. Acquisitions, Sale of Hospira Infusion Systems Net Assets, Research and Development and Collaborative Arrangements, Equity-Method Investments and Cost-Method Investment in Pfizer’s 2017 Financial Report.
While we have received the full purchase price excluding the contingent amount as of the February 3, 2017 closing, the sale of the HIS net assets was not completed in certain non-U.S. jurisdictions due to temporary regulatory or operational constraints. In these jurisdictions, which represent a relatively small portion of the HIS net assets, we have continued to operate the net assets for the net economic benefit of ICU Medical, and we are indemnified by ICU Medical against risks associated with such operations during the interim period, subject to our obligations under the definitive transaction agreements. Sales of the HIS net assets have occurred in nearly all of these jurisdictions as of December 31, 2017 and we expect the sale of the HIS net assets in the remaining jurisdictions to be fully completed by the third quarter of 2018. As such, and as we have already received all of the non-contingent proceeds from the sale and ICU Medical is contractually obligated to complete the transaction, we have treated these jurisdictions as sold for accounting purposes.
In connection with the sale transaction, we entered into certain transitional agreements designed to facilitate the orderly transition of the HIS net assets to ICU Medical. These agreements primarily relate to administrative services, which are generally to be provided for a period of up to 24 months after the closing date. We will also manufacture and supply certain HIS products for ICU Medical and ICU Medical will manufacture and supply certain retained Pfizer products for us after closing, generally for a term of five years. These agreements are not material to Pfizer and none confers upon us the ability to influence the operating and/or financial policies of ICU Medical subsequent to the sale.
C. Licensing Arrangement
In 2016, we out-licensed PF-00547659, an investigational biologic being evaluated for the treatment of moderate-to-severe inflammatory bowel disease including ulcerative colitis and Crohn’s disease to Shire for an upfront payment of $90 million, up to $460 million in development and sales-based milestone payments and potential future royalty payments on commercialized products. The $90 million upfront payment was initially deferred and recognized in Other (income)/deductions––net ratably through December 2017. In the first quarter of 2018, we recognized $75 million in Other(income)/deductions––net for a milestone payment received from Shire related to their first dosing of a patient in a Phase III clinical trial of the compound for the treatment of ulcerative colitis (see Note 4).
D. Collaboration Arrangements

Collaboration with Merck & Co., Inc.
In 2013, we announced that we entered into a worldwide collaboration agreement, except for Japan, with Merck for the development and commercialization of ertugliflozin (PF-04971729), our oral sodium glucose cotransporter (SGLT2) inhibitor for the treatment of type 2 diabetes. Under the agreement, we collaborated with Merck on the clinical development of ertugliflozin and ertugliflozin-containing fixed-dose combinations with metformin and Januvia (sitagliptin) tablets, which were approved by the FDA in December 2017 and the European Commission in March 2018 as Steglatro, Segluromet and Steglujan, respectively. The Merck sales force will exclusively promote Steglatro and the two fixed-dose combination products and we will share revenues and certain costs with Merck on a 60%/40% basis, with Pfizer having the 40% share. Pfizer will record its share of the collaboration revenues as product sales as we supply the ertugliflozin active pharmaceutical ingredient to Merck for use in the alliance products.
In the first quarter of 2017, we received a $90 million milestone payment from Merck upon the FDA’s acceptance for review of the NDAs for ertugliflozin and two fixed-dose combinations (ertugliflozin plus Januvia (sitagliptin) and ertugliflozin plus metformin), which, as of December 31, 2017, was deferred and primarily reported in Other noncurrent liabilities, and through December 31, 2017, was being recognized in Other (income)/deductions––net over a multi-year period. As of December 31, 2017, we were due a $60 million milestone payment from Merck, which we received in the first quarter of 2018, in conjunction with the approval of ertugliflozin by the FDA. As of December 31, 2017, the $60 million due from Merck was deferred and primarily reported in Other noncurrent liabilities. As of April 1, 2018, we were due a $40 million milestone payment from Merck, which we subsequently received in April 2018, in conjunction with the approval of ertugliflozin in the EU. The $40 million milestone payment from Merck was recognized in Other (income)/deductions––net in the first quarter of 2018 (see Note 4). We are eligible for additional payments associated with the achievement of future regulatory and commercial milestones. In the first quarter of 2018, in connection with the adoption of a new accounting standard, as of January 1, 2018, the $60 million of deferred income and approximately $85 million of the $90 million of deferred income associated with the above-mentioned milestone payments were recorded to and included in the $584 million cumulative effect adjustment to Retained earnings. See Note 1B for additional information.
Collaboration with Eli Lilly & Company

In 2013, we entered into a collaboration agreement with Lilly to jointly develop and globally commercialize Pfizer’s tanezumab, which provides that Pfizer and Lilly will equally share product-development expenses as well as potential revenues and certain product-related costs. We received a $200 million upfront payment from Lilly in accordance with the collaboration agreement between Pfizer and Lilly, which was deferred and primarily reported in Other noncurrent liabilities, and through December 31, 2017, was being recognized in Other (income)/deductions––net over a multi-year period beginning in the second quarter of 2015. Pfizer and Lilly resumed the Phase 3 chronic pain program for tanezumab in July 2015. The FDA granted Fast Track designation for tanezumab for the treatment of chronic pain in patients with osteoarthritis and chronic low back pain in June 2017. Under the collaboration agreement with Lilly, we are eligible to receive additional payments from Lilly upon the achievement of specified regulatory and commercial milestones.

In the first quarter of 2018, in connection with the adoption of a new accounting standard, as of January 1, 2018, approximately $107 million of deferred income associated with the above-mentioned upfront payment was recorded to and included in the $584 million cumulative effect adjustment to Retained earnings. See Note 1B for additional information. Approximately $52 million of the upfront payment continues to be deferred of which approximately $33 million is reported in Other current liabilities and approximately $19 million is reported in Other noncurrent liabilities as of April 1, 2018. This amount is expected to be recognized in Other (income)/deductions––net over the remaining development period for the product between 2018 and 2020.
v3.8.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
 3 Months Ended
Apr. 01, 2018
Restructuring and Related Activities [Abstract]  
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives

We incur significant costs in connection with acquiring, integrating and restructuring businesses and in connection with our global cost-reduction/productivity initiatives. For example:
•
In connection with acquisition activity, we typically incur costs associated with executing the transactions, integrating the acquired operations (which may include expenditures for consulting and the integration of systems and processes), and restructuring the combined company (which may include charges related to employees, assets and activities that will not continue in the combined company); and
•
In connection with our cost-reduction/productivity initiatives, we typically incur costs and charges associated with site closings and other facility rationalization actions, workforce reductions and the expansion of shared services, including the development of global systems.

All of our businesses and functions may be impacted by these actions, including sales and marketing, manufacturing and R&D, as well as groups such as information technology, shared services and corporate operations.

In connection with our acquisition of Hospira, we are focusing our efforts on achieving an appropriate cost structure for the combined company. We expect to incur costs of approximately $1 billion (not including costs of $215 million associated with the return of acquired IPR&D rights as described in the Current-Period Key Activities section of Notes to Consolidated Financial Statements––Note 3. Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives in our 2017 Financial Report) associated with the integration of Hospira. The majority of these costs are expected to be incurred within the three-year period post-acquisition.
As a result of the evaluation performed in connection with our decision in September 2016 to not pursue, at that time, splitting IH and EH into two separate publicly-traded companies, we identified new opportunities to potentially achieve greater optimization and efficiency to become more competitive in our business. Therefore, in early 2017, we initiated new enterprise-wide cost reduction/productivity initiatives, which we expect to substantially complete by the end of 2019. These initiatives encompass all areas of our cost base and include:
•
Optimization of our manufacturing plant network to support IH and EH products and pipelines. During 2017-2019, we expect to incur costs of approximately $800 million related to this initiative. Through April 1, 2018, we incurred approximately $237 million associated with this initiative.
•
Activities in non-manufacturing related areas, which include further centralization of our corporate and platform functions, as well as other activities where opportunities are identified. During 2017-2019, we expect to incur costs of approximately $300 million related to this initiative. Through April 1, 2018, we incurred approximately $195 million associated with this initiative.
The costs expected to be incurred during 2017-2019, of approximately $1.1 billion for the above-mentioned programs (but not including expected costs associated with the Hospira integration), include restructuring charges, implementation costs and additional depreciation––asset restructuring. Of this amount, we expect that about 20% of the total charges will be non-cash.
Current-Period Key Activities

For the three months ended April 1, 2018, we incurred costs of $83 million associated with the 2017-2019 program, $27 million associated with the integration of Hospira and $21 million associated with all other acquisition-related initiatives.
The following table provides the components of costs associated with acquisitions and cost-reduction/productivity initiatives:
 
 
Three Months Ended
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

Restructuring (credits)/charges:
 
 

 
 

Employee terminations
 
$
(8
)
 
$
(30
)
Asset impairments
 
2

 
24

Exit costs
 
(3
)
 
2

Restructuring credits(a)
 
(9
)
 
(5
)
Transaction costs(b)
 
—

 
12

Integration costs(c)
 
52

 
77

Restructuring charges and certain acquisition-related costs
 
43

 
84

Net periodic benefit costs recorded in Other (income)/deductions––net(d)
 
32

 
74

Additional depreciation––asset restructuring recorded in Cost of sales(e)

 
17

 
14

Implementation costs recorded in our condensed consolidated statements of income as follows(f):
 
 

 
 

Cost of sales
 
16

 
15

Selling, informational and administrative expenses
 
17

 
9

Research and development expenses
 
6

 
7

Total implementation costs
 
39

 
31

Total costs associated with acquisitions and cost-reduction/productivity initiatives
 
$
131

 
$
202


(a) 
In the three months ended April 1, 2018, restructuring credits are primarily associated with our acquisition of Hospira, as well as cost-reduction and productivity initiatives not associated with acquisitions. In the three months ended April 2, 2017, restructuring credits are largely associated with cost-reduction and productivity initiatives not associated with acquisitions, partially offset by charges related to our acquisitions of Medivation and Anacor. In the three months ended April 1, 2018, Employee terminations primarily include revisions of our estimates of severance benefits. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, many of which may be paid out during periods after termination.
The restructuring activities for the three months ended April 1, 2018 are associated with the following:
•
EH ($14 million income); WRD/GPD ($2 million income); manufacturing operations ($2 million); and Corporate ($4 million).
The restructuring activities for the three months ended April 2, 2017 are associated with the following:
•
IH ($7 million); EH ($18 million income); WRD/GPD ($13 million income); manufacturing operations ($17 million); and Corporate ($2 million).
(b) 
Transaction costs represent external costs for banking, legal, accounting and other similar services, virtually all of which in the first quarter of 2017 were directly related to our acquisition of Medivation.
(c) 
Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes. In the first quarters of 2018 and 2017, integration costs primarily relate to our acquisition of Hospira.
(d) 
In the three months ended April 1, 2018, represents the net pension curtailments and settlements other than service costs reclassified from employee terminations and integration costs to Other (income)/deductions––net upon the adoption of a new accounting standard in the first quarter of 2018. In the three months ended April 2, 2017, composed of (i) $48 million, representing the net pension curtailments and settlements other than service costs reclassified to Other (income)/deductions––net upon the retrospective adoption of a new accounting standard in the first quarter of 2018 and (ii) $25 million, representing the net periodic benefit costs, excluding service costs, reclassified to Other (income)/deductions––net as a result of the retrospective adoption of a new accounting standard in the first quarter of 2018. These costs represent accelerated amortization of actuarial losses and prior service costs upon the settlement of the remaining obligation associated with the Hospira U.S. qualified defined benefit pension plan. For additional information, see Note 1B.
(e) 
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
(f) 
Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
The following table provides the components of and changes in our restructuring accruals:
(MILLIONS OF DOLLARS)
 
Employee
Termination Costs

 
Asset
Impairment Charges

 
Exit Costs

 
Accrual

Balance, December 31, 2017(a)
 
$
1,039

 
$
—

 
$
66

 
$
1,105

Provision/(credit)
 
(8
)
 
2

 
(3
)
 
(9
)
Utilization and other(b)
 
(85
)
 
(2
)
 
(14
)
 
(100
)
Balance, April 1, 2018(c)
 
$
946

 
$
—

 
$
49

 
$
995


(a) 
Included in Other current liabilities ($643 million) and Other noncurrent liabilities ($462 million).
(b) 
Includes adjustments for foreign currency translation.
(c) 
Included in Other current liabilities ($565 million) and Other noncurrent liabilities ($431 million).
v3.8.0.1
Other (Income)/Deductions - Net
 3 Months Ended
Apr. 01, 2018
Other Income and Expenses [Abstract]  
Other (Income)/Deductions - Net
Other (Income)/Deductions—Net
The following table provides components of Other (income)/deductions––net:
 
 
Three Months Ended
(MILLIONS OF DOLLARS)
 
April 1,
2018


April 2,
2017

Interest income
 
$
(77
)
 
$
(81
)
Interest expense
 
310

 
309

Net interest expense
 
233

 
228

Royalty-related income
 
(96
)
 
(86
)
Net gains on asset disposals(a)
 
(19
)
 
(90
)
Income from collaborations, out-licensing arrangements and sales of compound/product rights(b)
 
(142
)
 
(47
)
Net unrealized gains on equity securities(c)
 
(111
)
 
—

Net periodic benefit costs/(credits) other than service costs(d)
 
(82
)
 
62

Certain legal matters, net
 
(19
)
 
8

Certain asset impairments
 
—

 
12

Loss on sale of HIS net assets(e)
 
3

 
37

Business and legal entity alignment costs(f)
 
3

 
21

Other, net(g)
 
51

 
(84
)
Other (income)/deductions––net
 
$
(178
)
 
$
60


(a) 
In the first quarter of 2018, primarily includes net gains on sales of investments in equity and debt securities (approximately $12 million). In the first quarter of 2017, primarily includes net gains on sales of investments in equity and debt securities (approximately $42 million) and a gain on sale of property (approximately $48 million).
(b) 
Includes income from upfront and milestone payments from our collaboration partners and income from out-licensing arrangements and sales of compound/product rights. In the first quarter of 2018, primarily includes, among other things, a $75 million milestone payment received from Shire related to their first dosing of a patient in a Phase III clinical trial of a compound out-licensed by Pfizer to Shire for the treatment of ulcerative colitis, and a $40 million milestone payment from Merck in conjunction with the approval of ertugliflozin in the EU. For additional information, see Note 2C and Note 2D.
(c) 
Represents the unrealized net gains on equity securities reflecting the adoption of a new accounting standard in the first quarter of 2018. Approximately $61 million of this unrealized gain relates to our investment in ICU Medical stock, which is held by an international entity and therefore valued as of February 23, 2018, the international quarter end. Prior to the adoption of the new standard, net unrealized gains and losses on virtually all readily tradeable equity securities were reported in Accumulated other comprehensive income. For additional information, see Note 1B and Note 7B.
(d) 
Represents the net periodic benefit costs/(credits), excluding service costs, as a result of the adoption of a new accounting standard in the first quarter of 2018. Effective January 1, 2018, the U.S. Pfizer Consolidated Pension Plan was frozen to future benefit accruals and for the first quarter of 2018, resulted in the recognition of lower net periodic benefit costs due to the extension of the amortization period for the actuarial losses and the elimination of service costs. There was also a greater than expected gain on plan assets due to a higher plan asset base compared to the first quarter of 2017. For additional information, see Note 1B and Note 10.
(e)  
In the first quarter of 2018 and 2017, represents an incremental charge to amounts previously recorded in 2016 to write down the HIS net assets to fair value less costs to sell related to the sale of HIS net assets to ICU Medical on February 3, 2017. For additional information, see Note 2B.
(f) 
In the first quarter of 2018 and 2017, represents expenses for changes to our infrastructure to align our commercial operations, including costs to internally separate our businesses into distinct legal entities, as well as to streamline our intercompany supply operations to better support each business.
(g) 
In the first quarter of 2018, primarily includes, among other things, charges of $102 million, reflecting the change in the fair value of contingent consideration, partially offset by dividend income of $59 million from our investment in ViiV. In the first quarter of 2017, primarily includes, among other things, dividend income of $43 million from our investment in ViiV.
v3.8.0.1
Tax Matters
 3 Months Ended
Apr. 01, 2018
Income Tax Disclosure [Abstract]  
Tax Matters
Tax Matters

A. Taxes on Income from Continuing Operations
In the fourth quarter of 2017, we recorded an estimate of certain tax effects of the TCJA, including the impact on deferred tax assets and liabilities from the reduction in the U.S. Federal corporate tax rate from 35% to 21%, the impact on valuation allowances and other state income tax considerations, the $15.2 billion repatriation tax liability on accumulated post-1986 foreign earnings for which we plan to elect payment over eight years through 2026 (with the first of eight installments due in April 2019) that is reported primarily in Other taxes payable, and deferred taxes on basis differences expected to give rise to future taxes on global intangible low-taxed income. In addition, we had provided deferred tax liabilities in the past on foreign earnings that were not indefinitely reinvested. As a result of the TCJA, we reversed an estimate of the deferred taxes that are no longer expected to be needed due to the change to the territorial tax system. The estimated amounts recorded may change in the future due to uncertain tax positions. With respect to the aforementioned repatriation tax liability related to the TCJA repatriation tax, our obligations may vary as a result of changes in our uncertain tax positions and/or availability of attributes such as foreign tax and other credit carryforwards.
The TCJA subjects a U.S. shareholder to current tax on global intangible low-taxed income earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that we are permitted to make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as global intangible low-taxed income in future years or provide for the tax expense related to such income in the year the tax is incurred. We have elected to recognize deferred taxes for temporary differences expected to reverse as global intangible low-taxed income in future years. However, given the complexity of these provisions, we have not finalized our analysis. We were able to make a reasonable estimate of the deferred taxes on the temporary differences expected to reverse in the future and provided a provisional deferred tax liability of approximately $1 billion as of December 31, 2017. The provisional amount is based on the evaluation of certain temporary differences inside each of our foreign subsidiaries that are expected to reverse as global intangible low-taxed income. However, as we continue to evaluate the TCJA’s global intangible low-taxed income provisions during the measurement period, we may revise the methodology used for determining the deferred tax liability associated with such income.
We believe that we have made reasonable estimates with respect to each of the above items, however, all of the amounts recorded are provisional as we have not completed our analysis of the complex and far reaching effects of the TCJA. Further, we continue to consider our assertions on any remaining outside basis differences in our foreign subsidiaries as of April 1, 2018 and have not completed our analysis. Under guidance issued by the staff of the SEC, we expect to finalize our accounting related to the tax effects of the TCJA on deferred taxes, valuation allowances, state tax considerations, the repatriation tax liability, global intangible low-taxed income, and any remaining outside basis differences in our foreign subsidiaries during 2018 as we complete our analysis, computations and assertions. It is possible that others, applying reasonable judgment to the same facts and circumstances, could develop and support a range of alternative estimated amounts. We will revise these estimates during 2018 as we gather additional information to complete our tax returns and as any interpretation or clarification of the TCJA occurs through legislation, U.S. Treasury actions or other means.
Our effective tax rate for continuing operations was 13.5% for the first quarter of 2018, compared to 20.8% for the first quarter of 2017.
The lower effective tax rate for the first quarter of 2018 in comparison with the same period in 2017 was primarily due to:
•
the December 2017 enactment of the TCJA;
•
a favorable change in the jurisdictional mix of earnings as a result of operating fluctuations in the normal course of business, as well as
•
the non-recurrence of the tax impact on an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell related to the sale of HIS net assets to ICU Medical.
B. Deferred Taxes

We have not completed our analysis of the TCJA on our prior assertion of indefinitely reinvested earnings. Accordingly, we continue to evaluate our assertion with respect to our accumulated foreign earnings subject to the deemed repatriation tax and we also continue to evaluate the amount of earnings that are indefinitely reinvested. Additionally, we continue to evaluate our assertions on any remaining outside basis differences in our foreign subsidiaries as of April 1, 2018 as we have not finalized our analysis of the effects of all of the new provisions in the TCJA. As of April 1, 2018, it is not practicable to estimate the additional deferred tax liability that would be recorded if the earnings subject to the deemed repatriation tax and any remaining outside basis differences as of April 1, 2018 are not indefinitely reinvested. In accordance with the authoritative guidance issued by the SEC Staff Accounting Bulletin 118, we expect to complete our analysis within the measurement period.
C. Tax Contingencies

We are subject to income tax in many jurisdictions, and a certain degree of estimation is required in recording the assets and liabilities related to income taxes. All of our tax positions are subject to audit by the local taxing authorities in each tax jurisdiction. These tax audits can involve complex issues, interpretations and judgments and the resolution of matters may span multiple years, particularly if subject to negotiation or litigation. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but our estimates of unrecognized tax benefits and potential tax benefits may not be representative of actual outcomes, and variation from such estimates could materially affect our financial statements in the period of settlement or when the statutes of limitations expire, as we treat these events as discrete items in the period of resolution.
The U.S. is one of our major tax jurisdictions, and we are regularly audited by the IRS:
•
With respect to Pfizer, the IRS has issued a Revenue Agent’s Report (RAR) for tax years 2009-2010. We are not in agreement with the RAR and are currently appealing certain disputed issues. Tax years 2011-2013 are currently under audit. Tax years 2014-2018 are open, but not under audit. All other tax years are closed.
•
With respect to Hospira, the IRS is currently auditing tax year 2014 through short-year 2015. All other tax years are closed. The tax years under audit for Hospira are not considered material to Pfizer.
•
With respect to Anacor and Medivation, the open tax years are not considered material to Pfizer.
In addition to the open audit years in the U.S., we have open audit years in other major tax jurisdictions, such as Canada (2010-2018), Japan (2015-2018), Europe (2011-2018, primarily reflecting Ireland, the United Kingdom, France, Italy, Spain and Germany), Latin America (1998-2018, primarily reflecting Brazil) and Puerto Rico (2010-2018).
D. Tax Provision on Other Comprehensive (Loss)/Income
The following table provides the components of Tax provision on other comprehensive (loss)/income:
 
 
Three Months Ended
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

Foreign currency translation adjustments, net(a)
 
$
(34
)
 
$
(21
)
Unrealized holding losses on derivative financial instruments, net
 
(4
)
 
3

Reclassification adjustments for (gains)/losses included in net income
 
(7
)
 
(52
)
Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b)
 
1

 
—

 
 
(9
)
 
(49
)
Unrealized holding gains on available-for-sale securities, net
 
20

 
38

Reclassification adjustments for (gains)/losses included in net income
 
(22
)
 
11

Reclassification adjustments for tax on unrealized gains from AOCI to Retained earnings(c)
 
(45
)
 
—

 
 
(47
)
 
48

Benefit plans: actuarial gains, net
 
38

 
—

Reclassification adjustments related to amortization
 
14

 
50

Reclassification adjustments related to settlements, net
 
9

 
12

Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b)
 
637

 
—

Other
 
(20
)
 
5

 
 
677

 
66

Benefit plans: prior service (costs)/credits and other, net
 
—

 
—

Reclassification adjustments related to amortization
 
(11
)
 
(17
)
Reclassification adjustments related to curtailments, net
 
(7
)
 
(3
)
Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b)
 
(144
)
 
—

Other
 
6

 
—

 
 
(155
)
 
(19
)
Tax provision on other comprehensive (loss)/income
 
$
432

 
$
25


(a) 
Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.
(b) 
For additional information on the adoption of a new accounting standard related to reclassification of certain tax effects from AOCI, see Note 1B.
(c) 
For additional information on the adoption of a new accounting standard related to financial assets and liabilities, see Note 1B.
v3.8.0.1
Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests
 3 Months Ended
Apr. 01, 2018
Equity [Abstract]  
Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests
Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests
The following table provides the changes, net of tax, in Accumulated other comprehensive loss:
 
 
Net Unrealized Gains/(Losses)
 
Benefit Plans
 
 
(MILLIONS OF DOLLARS)
 
Foreign Currency Translation Adjustments

 
Derivative Financial Instruments

 
Available-For-Sale Securities

 
Actuarial Gains/(Losses)

 
Prior Service (Costs)/Credits and Other

 
Accumulated Other Comprehensive Income/(Loss)

Balance, December 31, 2017
 
$
(5,180
)
 
$
(30
)
 
$
401

 
$
(5,262
)
 
$
750

 
$
(9,321
)
Other comprehensive income/(loss) due to the adoption of new accounting standards(a)
 
(2
)
 
(1
)
 
(416
)
 
(637
)
 
144

 
(913
)
Other comprehensive income/(loss)(b)
 
808

 
(59
)
 
(12
)
 
135

 
(39
)
 
832

Balance, April 1, 2018
 
$
(4,375
)
 
$
(90
)
 
$
(28
)
 
$
(5,764
)
 
$
855

 
$
(9,402
)
(a) 
Amounts represent the cumulative effect adjustments as of January 1, 2018 from the adoption of new accounting standards related to (i) financial assets and liabilities and (ii) the reclassification of certain tax effects from AOCI. For additional information, see Note 1B.
(b) 
Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests of $1 million income for the first three months of 2018.

As of April 1, 2018, with respect to derivative financial instruments, the amount of unrealized pre-tax net losses on derivative financial instruments estimated to be reclassified into income within the next 12 months is approximately $222 million, which is expected to be offset primarily by net gains resulting from reclassification adjustments related to foreign currency exchange-denominated forecasted intercompany inventory sales and net gains related to available-for-sale debt securities.
v3.8.0.1
Financial Instruments
 3 Months Ended
Apr. 01, 2018
Financial Instruments [Abstract]  
Financial Instruments
Financial Instruments

A. Fair Value Measurements

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

On January 1, 2018, we adopted a new accounting and disclosure standard related to accounting for the recognition of financial assets and liabilities. For additional information see Note 1B.
The following table presents the financial assets and liabilities measured at fair value using a market approach on a recurring basis by balance sheet categories and fair value hierarchy level as defined in Notes to Consolidated Financial Statements––Note 1E. Basis of Presentation and Significant Accounting Policies: Fair Value in Pfizer’s 2017 Financial Report, in valuing financial instruments on a recurring basis:
 
 
Total
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
(MILLIONS OF DOLLARS)
 
April 1, 2018
 
December 31, 2017
Financial assets measured at fair value on a recurring basis:
 
 
 
 
 
 
 
 
 
 
 
 
Short-term investments
 
 
 
 
 
 
 
 
 
 
 
 
Classified as equity securities:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
1,054

 
$
—

 
$
1,054

 
$
2,115

 
$
—

 
$
2,115

Equity(a)
 
31

 
20

 
11

 
35

 
16

 
19

 
 
1,085

 
20

 
1,065

 
2,150

 
16

 
2,134

Classified as available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
Government and agency—non-U.S.
 
3,370

 
—

 
3,370

 
12,242

 
—

 
12,242

Corporate
 
3,581

 
—

 
3,581

 
2,766

 
—

 
2,766

Government—U.S.
 
—

 
—

 
—

 
252

 
—

 
252

Agency asset-backed—U.S.
 
22

 
—

 
22

 
23

 
—

 
23

Other asset-backed
 
33

 
—

 
33

 
79

 
—

 
79

 
 
7,006

 
—

 
7,006

 
15,362

 
—

 
15,362

Total short-term investments
 
8,091

 
20

 
8,071

 
17,512

 
16

 
17,496

Other current assets
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
93

 
—

 
93

 
104

 
—

 
104

Foreign exchange contracts
 
196

 
—

 
196

 
234

 
—

 
234

Total other current assets
 
289

 
—

 
289

 
337

 
—

 
337

Long-term investments
 
 
 
 
 
 
 
 
 
 
 
 
Classified as equity securities:
 
 
 
 
 
 
 
 
 
 
 
 
Equity(a)
 
1,497

 
1,465

 
32

 
1,440

 
1,398

 
42

Classified as trading securities:
 
 
 
 
 
 
 
 
 
 
 
 
Debt
 
60

 
60

 
—

 
73

 
73

 
—

 
 
1,557

 
1,525

 
32

 
1,514

 
1,472

 
42

Classified as available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
Government and agency—non-U.S.
 
247

 
—

 
247

 
387

 
—

 
387

Corporate
 
4,103

 
46

 
4,058

 
4,172

 
36

 
4,136

Government—U.S.
 
465

 
—

 
465

 
495

 
—

 
495

Other asset-backed
 
17

 
—

 
17

 
35

 
—

 
35

 
 
4,833

 
46

 
4,787

 
5,090

 
36

 
5,054

Total long-term investments
 
6,390

 
1,571

 
4,819

 
6,603

 
1,507

 
5,096

Other noncurrent assets
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
325

 
—

 
325

 
477

 
—

 
477

Foreign exchange contracts
 
92

 
—

 
92

 
7

 
—

 
7

Total other noncurrent assets
 
418

 
—

 
418

 
484

 
—

 
484

Total assets
 
$
15,188

 
$
1,590

 
$
13,597

 
$
24,937

 
$
1,523

 
$
23,414

 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities measured at fair value on a recurring basis:
 
 
 
 
 
 
 
 
 
 
 
 
Other current liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
2

 
$
—

 
$
2

 
$
1

 
$
—

 
$
1

Foreign exchange contracts
 
387

 
—

 
387

 
201

 
—

 
201

Total other current liabilities
 
389

 
—

 
389

 
201

 
—

 
201

Other noncurrent liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
424

 
—

 
424

 
177

 
—

 
177

Foreign exchange contracts
 
190

 
—

 
190

 
313

 
—

 
313

Total other noncurrent liabilities
 
614

 
—

 
614

 
490

 
—

 
490

Total liabilities
 
$
1,003

 
$
—

 
$
1,003

 
$
691

 
$
—

 
$
691

(a) 
As of April 1, 2018 and December 31, 2017, equity securities of $31 million and $42 million, respectively, are held in trust for benefits attributable to the former Pharmacia Savings Plus Plan.
Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis
The following table presents the financial liabilities not measured at fair value on a recurring basis, including the carrying values and estimated fair values:
 
 
April 1, 2018
 
December 31, 2017
 
 
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
(MILLIONS OF DOLLARS)
 
 
 
Total
 
Level 2
 
 
 
Total
 
Level 2
Financial Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, excluding the current portion
 
$
31,831

 
$
33,303

 
$
33,303

 
$
33,538

 
$
37,253

 
$
37,253


The differences between the estimated fair values and carrying values of held-to-maturity debt securities, restricted stock and private equity securities at cost, and short-term borrowings not measured at fair value on a recurring basis were not significant as of April 1, 2018 or December 31, 2017. The fair value measurements of our held-to-maturity debt securities and our short-term borrowings are based on Level 2 inputs. The fair value measurements of our private equity securities carried at cost, which represent investments in the life sciences sector, are based on Level 3 inputs.

In addition, as of April 1, 2018 and December 31, 2017, we had long-term receivables whose fair value is based on Level 3 inputs. As of April 1, 2018 and December 31, 2017, the differences between the estimated fair values and carrying values of these receivables were not significant.
Total Short-Term and Long-Term Investments
The following table represents our investments by classification type:
(MILLIONS OF DOLLARS)
 
April 1, 2018
 
December 31, 2017
Short-term investments
 
 
 
 
Equity securities
 
$
1,085

 
$
2,150

Available-for-sale debt securities
 
7,006

 
15,362

Held-to-maturity debt securities
 
1,028

 
1,138

Total Short-term investments
 
$
9,119

 
$
18,650

 
 
 
 
 
Long-term investments
 
 
 
 
Equity securities
 
$
1,557

 
$
1,514

Available-for-sale debt securities
 
4,833

 
5,090

Held-to-maturity debt securities
 
78

 
4

Private equity investments carried at equity-method or cost
 
477

 
408

Total Long-term investments
 
$
6,945

 
$
7,015

Held-to-maturity cash equivalents
 
$
876

 
$
719



Fair Value Methodology
The following inputs and valuation techniques were used to estimate the fair value of our financial assets and liabilities:
•
Trading debt securities—quoted market prices.
•
Available-for-sale debt securities—third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data and credit-adjusted interest rate yield curves. Loan-backed, receivable-backed, and mortgage-backed debt securities are valued by third-party models that use significant inputs derived from observable market data like prepayment rates, default rates, and recovery rates.
•
Equity securities—quoted market prices.
•
Derivative assets and liabilities (financial instruments)—third-party matrix-pricing model that uses significant inputs derived from or corroborated by observable market data. Where applicable, these models discount future cash flow amounts using market-based observable inputs, including interest rate yield curves, and forward and spot prices for currencies. The credit risk impact to our derivative financial instruments was not significant.
•
Money market funds—observable net asset value prices.
We periodically review the methodologies, inputs and outputs of third-party pricing services for reasonableness. Our procedures can include, for example, referencing other third-party pricing models, monitoring key observable inputs (like LIBOR interest rates) and selectively performing test-comparisons of values with actual sales of financial instruments.
B. Investments
At April 1, 2018, the investment securities portfolio consisted of debt securities that were virtually all investment-grade.

Information on investments in debt and equity securities at April 1, 2018 and December 31, 2017 is as follows, including, as of April 1, 2018, the contractual maturities, or as necessary, the estimated maturities, of the available-for-sale and held-to maturity debt securities:
 
 
April 1, 2018
 
December 31, 2017
 
 
 
 
Gross Unrealized
 
 
 
Maturities (in Years)
 
 
 
 
Gross Unrealized
 
 
 
(MILLIONS OF DOLLARS)
 
Amortized Cost

 
Gains

 
Losses

 
Fair Value

 
Within 1

 
Over 1
to 5

 
Over 5

 
Total

 
Amortized Cost

 
Gains

 
Losses

 
Fair Value

Available-for-sale debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government and agency––non-U.S.
 
$
3,536

 
$
102

 
$
(21
)
 
$
3,617

 
$
3,370

 
$
247

 
$
—

 
$
3,617

 
$
12,616

 
$
61

 
$
(48
)
 
$
12,629

Corporate(a)
 
7,771

 
6

 
(93
)
 
7,685

 
3,581

 
2,674

 
1,430

 
7,685

 
6,955

 
15

 
(33
)
 
6,938

Government––U.S.
 
490

 
—

 
(25
)
 
466

 
—

 
462

 
3

 
466

 
765

 
—

 
(19
)
 
747

Agency asset-backed––U.S.
 
23

 
—

 
(1
)
 
22

 
22

 
—

 
—

 
22

 
24

 
—

 
(1
)
 
24

Other asset-backed(b)
 
50

 
—

 
—

 
50

 
33

 
15

 
2

 
50

 
114

 
—

 
—

 
114

Held-to-maturity debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits and other
 
1,578

 
—

 
—

 
1,578

 
1,500

 
74

 
4

 
1,578

 
1,091

 
—

 
—

 
1,091

Government and agency––non-U.S.
 
404

 
—

 
—

 
404

 
404

 
—

 
—

 
404

 
770

 
—

 
—

 
770

Total debt securities
 
$
13,852

 
$
108

 
$
(139
)
 
$
13,821

 
$
8,910

 
$
3,472

 
$
1,439

 
$
13,821

 
$
22,337

 
$
77

 
$
(100
)
 
$
22,313

Available-for-sale equity securities(c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 

 


 


 


 
 
 
 
 
 
 
 
 
$
2,115

 
$
—

 
$
—

 
$
2,115

Equity
 

 


 


 


 
 
 
 
 
 
 
 
 
728

 
586

 
(124
)
 
1,190

Total available-for-sale equity securities
 

 


 


 


 
 
 
 
 
 
 
 
 
$
2,843

 
$
586

 
$
(124
)
 
$
3,304

(a) 
Issued by a diverse group of corporations.
(b) 
Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.
(c) 
Upon the 2018 adoption of a new accounting standard related to financial assets and liabilities, available-for-sale equity securities were classified as equity securities. For additional information see Note 1B.
The following table presents the unrealized gains and losses for the period that relates to equity securities still held at the reporting date:
(MILLIONS OF DOLLARS)
 
April 1, 2018

Net gains recognized during the period on equity securities(a)
 
$
98

Less: Net losses recognized during the period on equity securities sold during the period
 
(12
)
Unrealized gains during the reporting period on equity securities still held at the reporting date
 
86


(a) 
Includes $111 million of unrealized net gains reflecting the adoption of a new accounting standard in the first quarter of 2018 (see Note 1B and Note 4), and $13 million of unrealized loss on other equity securities.
C. Short-Term Borrowings
Short-term borrowings include:
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
December 31,
2017

Commercial paper
 
$
4,000

 
$
6,100

Current portion of long-term debt, principal amount
 
4,752

 
3,532

Other short-term borrowings, principal amount(a)
 
257

 
320

Total short-term borrowings, principal amount
 
9,009

 
9,951

Net fair value adjustments related to hedging and purchase accounting
 
10

 
14

Net unamortized discounts, premiums and debt issuance costs
 
(8
)
 
(12
)
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted
 
$
9,010

 
$
9,953

(a) 
Other short-term borrowings primarily include cash collateral. For additional information, see Note 7F.
D. Long-Term Debt
The following table provides the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
December 31,
2017

Total long-term debt, principal amount
 
$
31,484

 
$
32,783

Net fair value adjustments related to hedging and purchase accounting
 
461

 
872

Net unamortized discounts, premiums and debt issuance costs
 
(122
)
 
(125
)
Other long-term debt
 
8

 
8

Total long-term debt, carried at historical proceeds, as adjusted
 
$
31,831

 
$
33,538

Current portion of long-term debt, carried at historical proceeds
 
$
4,763

 
$
3,546

E. Other Noncurrent Liabilities

In December 2017, the U.S. FDA approved Bosulif (bosutinib) for the treatment of patients with newly-diagnosed chronic-phase Ph+ CML. In connection with the U.S. approval, we incurred an obligation to make guaranteed fixed annual payments over a ten-year period aggregating $416 million related to a research and development arrangement. We recorded the estimated net present value of $364 million as an intangible asset in Developed technology rights, and the present value of the remaining future payments of $253 million in Other noncurrent liabilities and $30 million in Other current liabilities as of April 1, 2018.
In August 2017, the U.S. FDA approved Besponsa (inotuzumab ozogamicin) and in June 2017, the EU approved Besponsa as monotherapy for the treatment of adults with relapsed or refractory CD22-positive B-cell precursor acute lymphoblastic leukemia. In connection with the U.S. approval, we incurred an obligation to make guaranteed fixed annual payments over a nine-year period aggregating $296 million related to a research and development arrangement. We recorded the estimated net present value of $248 million as an intangible asset in Developed technology rights, and the present value of the remaining future payments of $230 million in Other noncurrent liabilities and $7 million in Other current liabilities as of April 1, 2018. In connection with the EU approval, we incurred an obligation to make guaranteed fixed annual payments over a nine-year period aggregating $148 million related to a research and development arrangement. We recorded the estimated net present value of $123 million as an intangible asset in Developed technology rights, and the present value of the remaining future payments of $116 million in Other noncurrent liabilities and $3 million in Other current liabilities as of April 1, 2018.

The differences between the estimated fair values, using a market approach in the Level 2 fair value hierarchy, and carrying values of the obligations were not significant as of April 1, 2018.
F. Derivative Financial Instruments and Hedging Activities

We adopted a new accounting standard in the first quarter of 2018, as of January 2018. For additional information, see Note 1B.
Foreign Exchange Risk

A significant portion of our revenues, earnings and net investments in foreign affiliates is exposed to changes in foreign exchange rates. We manage our foreign exchange risk, in part, through operational means, including managing same-currency revenues in relation to same-currency costs and same-currency assets in relation to same-currency liabilities. We also manage our foreign exchange risk, depending on market conditions, through fair value, cash flow, and net investment hedging programs through the use of derivative financial instruments and foreign currency debt. These financial instruments serve to protect net income against the impact of remeasurement into another currency, or against the impact of translation into U.S. dollars of certain foreign exchange-denominated transactions.

All derivative financial instruments used to manage foreign currency risk are measured at fair value and are reported as assets or liabilities on the consolidated balance sheet. The derivative financial instruments primarily hedge or offset exposures in the euro, Japanese yen, U.K. pound, and Swedish krona. Changes in fair value are reported in earnings or in Other comprehensive income/(loss), depending on the nature and purpose of the financial instrument (hedge or offset relationship) and the effectiveness of the hedge relationships, as follows:
•
Generally, we recognize the gains and losses on foreign exchange contracts that are designated as fair value hedges in earnings upon the recognition of the change in fair value of the hedged risk. Upon the adoption of the new standard in 2018, for certain foreign exchange contracts, we exclude an amount from the assessment of hedge effectiveness and recognize that excluded amount through an amortization approach. We also recognize the offsetting foreign exchange impact attributable to the hedged item in earnings.
•
Generally, we record in Other comprehensive income/(loss) gains or losses on foreign exchange contracts that are designated as cash flow hedges and reclassify those amounts, as appropriate, into earnings in the same period or periods during which the hedged transaction affects earnings. Upon the adoption of the new standard in 2018, for certain foreign exchange contracts, we exclude an amount from the assessment of hedge effectiveness and recognize that excluded amount through an amortization approach.
•
Historically, as part of our net investment hedging program, we recognize the gain and loss impact on foreign exchange contracts designated as hedges of our net investments in earnings in three ways: over time––for the periodic net swap payments; immediately––to the extent of any change in the difference between the foreign exchange spot rate and forward rate; and upon sale or substantial liquidation of our net investments––to the extent of change in the foreign exchange spot rates. Upon the adoption of the new standard in 2018, for foreign exchange contracts, we exclude an amount from the assessment of hedge effectiveness and recognize that excluded amount through an amortization approach. We record in Other comprehensive income/(loss) the foreign exchange gains and losses related to foreign exchange-denominated debt designated as a hedge of our net investments in foreign subsidiaries and reclassify those amounts into earnings upon the sale or substantial liquidation of our net investments.
•
For certain foreign exchange contracts not designated as hedging instruments, we recognize the gains and losses on foreign currency exchange contracts that are used to offset the same foreign currency assets or liabilities immediately into earnings along with the earnings impact of the items they generally offset. These contracts essentially take the opposite currency position of that reflected in the month-end balance sheet to counterbalance the effect of any currency movement.
As a part of our cash flow hedging program, we designate foreign exchange contracts to hedge a portion of our forecasted euro, Japanese yen, U.K. pound, Canadian dollar, Australian dollar, and Chinese renminbi-denominated intercompany inventory sales expected to occur no more than two years from the date of each hedge.
For the three months ended April 2, 2017, any ineffectiveness is recognized immediately into earnings. There is no significant ineffectiveness for that period.

Interest Rate Risk

Our interest-bearing investments and borrowings are subject to interest rate risk. With respect to our investments, we strive to maintain a predominantly floating-rate basis position, but our strategy may change based on prevailing market conditions. We currently borrow primarily on a long-term, fixed rate basis. Historically, we strove to borrow primarily on a floating-rate basis; but in recent years we borrowed on a long-term, fixed-rate basis. From time to time, depending on market conditions, we will change the profile of our outstanding debt by entering into derivative financial instruments like interest rate swaps. We entered into derivative financial instruments to hedge or offset the fixed interest rates on the hedged item, matching the amount and timing of the hedged item. The derivative financial instruments primarily hedge U.S. dollar fixed-rate debt.

All derivative contracts used to manage interest rate risk are measured at fair value and reported as assets or liabilities on the consolidated balance sheet. Changes in fair value are reported in earnings, as follows:
•
We recognize the gains and losses on interest rate contracts that are designated as fair value hedges in earnings upon the recognition of the change in fair value of the hedged risk. We recognize the offsetting earnings impact of fixed-rate debt attributable to the hedged risk also in earnings.
For the three months ended April 2, 2017 any ineffectiveness is recognized immediately into earnings. There is no significant ineffectiveness for that period.
The following table provides the fair value of the derivative financial instruments and the related notional amounts presented between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
(MILLIONS OF DOLLARS)
 
April 1, 2018
 
December 31, 2017
 
 
 
 
Fair Value
 
 
 
Fair Value
 
 
Notional
 
Asset
 
Liability
 
Notional
 
Asset
 
Liability
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts(a)
 
$
18,777

 
$
258

 
$
442

 
$
18,723

 
$
179

 
$
459

Interest rate contracts
 
12,430

 
418

 
426

 
12,430

 
581

 
178

 
 
 
 
676

 
868

 
 
 
760

 
637

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
$
14,510

 
$
31

 
$
134

 
$
14,300

 
$
62

 
$
54

 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
$
707

 
$
1,003

 
 
 
$
822

 
$
691

(a) 
As of April 1, 2018, the notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion.
The following table provides information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk:
 
 
Amount of
Gains/(Losses)
Recognized in OID(a), (b)
 
Amount of Gains/(Losses)
Recognized in OCI(a), (c)
 
Amount of Gains/(Losses)
Reclassified from
OCI into OID and COS(a), (c)
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

 
April 1,
2018

 
April 2,
2017

 
April 1,
2018

 
April 2,
2017

Three Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments in Cash Flow Hedge Relationships:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts(d)
 
$
—

 
$
(3
)
 
$
(143
)
 
$
(9
)
 
$
(72
)
 
$
242

Amount excluded from effectiveness testing recognized in earnings based on an amortization approach
 
—

 
—

 
28

 
—

 
27

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments in Fair Value Hedge Relationships:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
(399
)
 
(92
)
 
—

 
—

 
—

 
—

Hedged item gain/(loss)
 
399

 
92

 
—

 
—

 
—

 
—

Foreign exchange contracts
 
(7
)
 
3

 
—

 
—

 
—

 
—

Hedged item gain/(loss)
 
8

 
(3
)
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments in Net Investment Hedge Relationships:
 
 

 
 

 
 

 
 

 
 

 
 

Foreign exchange contracts
 
—

 
—

 
(5
)
 
—

 
—

 
—

The portion of gains/(losses) on foreign exchange contracts excluded from the assessment of hedge effectiveness
 
—

 
—

 
2

 
—

 
6

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:
 
 

 
 

 
 

 
 

 
 

 
 

Foreign currency short-term borrowings(e)
 
—

 
—

 
(42
)
 
—

 
—

 
—

Foreign currency long-term debt(e)
 
—

 
—

 
(92
)
 
(57
)
 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments Not Designated as Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
(55
)
 
(140
)
 
—

 
—

 
—

 
—

All other net
 
—

 
—

 
—

 
—

 
—

 
—

 
 
$
(55
)
 
$
(143
)
 
$
(251
)
 
$
(66
)
 
$
(39
)
 
$
242

(a) 
OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income.
(b) 
For the three months ended April 2, 2017, there was no significant ineffectiveness.
(c) 
For derivative financial instruments in cash flow hedge relationships, the gains and losses are included in Other comprehensive (loss)/income––Unrealized holding losses on derivative financial instruments, net. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in Other comprehensive (loss)/income––Foreign currency translation adjustments, net.
(d) 
Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $156 million within the next 12 months into Cost of sales. The maximum length of time over which we are hedging future foreign exchange cash flow relates to our $1.9 billion U.K. pound debt maturing in 2043.
(e) 
Short-term borrowings include foreign currency short-term borrowings with carrying values of $1.5 billion as of April 1, 2018, which are used as hedging instruments in net investment hedges. Long-term debt includes foreign currency long-term borrowings with carrying values of $3.3 billion as of April 1, 2018, which are used as hedging instruments in net investment hedges.
The following table provides the total amount of each income and expense line in which the results of fair value or cash flow hedges are recorded:
 
 
Three Months Ended
(MILLIONS OF DOLLARS
 
April 1, 2018

Cost of sales
 
$
2,563

Other (income)/deductions—net
 
(178
)
The following table provides the amounts recorded in our condensed consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
 
 
Carrying Amount of Hedged Assets/Liabilities

 
Cumulative Amount of Fair Value Hedging Adjustment Gains/(Losses) Included in the Carrying Amount of the Hedged Assets/Liabilities

MILLIONS OF DOLLARS
 
April 1,
2018

 
April 1,
2018

Short-term investments
 
$
286

 
$
(1
)
Long-term investments
 
45

 
(1
)
Short-term borrowings, including current portion of long-term debt
 
999

 
1

Long-term debt
 
11,372

 
100


Certain of our derivative instruments are covered by associated credit-support agreements that have credit-risk-related contingent features designed to reduce both counterparties’ exposure to risk of defaulting on amounts owed by the other party. As of April 1, 2018, the aggregate fair value of these derivative instruments that are in a net liability position was $540 million, for which we have posted collateral of $596 million in the normal course of business. If there had been a downgrade to below an A rating by S&P or the equivalent rating by Moody’s, we would not have been required to post any additional collateral to our counterparties.
As of April 1, 2018, we received cash collateral of $145 million from various counterparties. The collateral primarily supports the approximate fair value of our derivative contracts. With respect to the collateral received, the obligations are reported in Short-term borrowings, including current portion of long-term debt.
G. Credit Risk

On an ongoing basis, we review the creditworthiness of counterparties to our foreign exchange and interest rate agreements and do not expect to incur a significant loss from failure of any counterparties to perform under the agreements. There are no significant concentrations of credit risk related to our financial instruments with any individual counterparty, except for certain significant customers. For additional information as to significant customers, see Notes to Consolidated Financial Statements––Note 18C. Segment, Geographic and Other Revenue Information: Other Revenue Information in Pfizer’s 2017 Financial Report. As of April 1, 2018, we had amounts due from a well-diversified, high quality group of bank ($1.2 billion), technology ($965 million) and energy sector ($758 million) companies around the world. For details about our investments, see Note 7B above.

In general, there is no requirement for collateral from customers. However, derivative financial instruments are executed under credit-support agreements that provide for the ability to request collateral payments, depending on levels of exposure, our credit rating and the credit rating of the counterparty, see Note 7F above.
v3.8.0.1
Inventories
 3 Months Ended
Apr. 01, 2018
Inventory Disclosure [Abstract]  
Inventories
Inventories
The following table provides the components of Inventories:
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
December 31,
2017

Finished goods
 
$
2,838

 
$
2,883

Work-in-process
 
4,485

 
3,908

Raw materials and supplies
 
825

 
788

Inventories(a)
 
$
8,148

 
$
7,578

Noncurrent inventories not included above(b)
 
$
640

 
$
683


(a) 
The change from December 31, 2017 reflects increases for certain products to meet targeted levels in the normal course of business, including supply recovery and inventory build for new product launches, as well as an increase due to foreign exchange.
(b) 
Included in Other noncurrent assets. There are no recoverability issues associated with these amounts.
v3.8.0.1
Identifiable Intangible Assets and Goodwill
 3 Months Ended
Apr. 01, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Identifiable Intangible Assets and Goodwill
Identifiable Intangible Assets and Goodwill

A. Identifiable Intangible Assets

Balance Sheet Information
The following table provides the components of Identifiable intangible assets:
 
 
April 1, 2018
 
December 31, 2017
(MILLIONS OF DOLLARS)
 
Gross
Carrying
Amount

 
Accumulated
Amortization

 
Identifiable
Intangible
Assets, less
Accumulated
Amortization

 
Gross
Carrying
Amount

 
Accumulated
Amortization

 
Identifiable
Intangible
Assets, less
Accumulated
Amortization

Finite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
Developed technology rights
 
$
89,877

 
$
(56,152
)
 
$
33,726

 
$
89,550

 
$
(54,785
)
 
$
34,765

Brands
 
2,149

 
(1,185
)
 
964

 
2,134

 
(1,152
)
 
982

Licensing agreements and other
 
1,969

 
(1,122
)
 
847

 
1,911

 
(1,096
)
 
815

 
 
93,996

 
(58,458
)
 
35,537

 
93,595

 
(57,033
)
 
36,562

Indefinite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
Brands and other
 
6,952

 


 
6,952

 
6,929

 


 
6,929

IPR&D
 
5,201

 


 
5,201

 
5,249

 


 
5,249

 
 
12,153

 


 
12,153

 
12,179

 


 
12,179

Identifiable intangible assets(a)
 
$
106,148

 
$
(58,458
)
 
$
47,690

 
$
105,774

 
$
(57,033
)
 
$
48,741


(a) 
The decrease in Identifiable intangible assets, less accumulated amortization, is primarily due to amortization, partially offset by an increase due to foreign exchange.
Our identifiable intangible assets are associated with the following, as a percentage of total identifiable intangible assets, less accumulated amortization:
 
 
April 1, 2018
 
 
IH
 
EH
 
WRD
Developed technology rights
 
68
%
 
32
%
 
—
%
Brands, finite-lived
 
75
%
 
25
%
 
—
%
Brands, indefinite-lived
 
71
%
 
29
%
 
—
%
IPR&D
 
82
%
 
11
%
 
7
%


Amortization

Total amortization expense for finite-lived intangible assets was $1.2 billion for the first quarter of 2018 and $1.2 billion for the first quarter of 2017.
B. Goodwill
The following table provides the components of and changes in the carrying amount of Goodwill:
(MILLIONS OF DOLLARS)
 
IH
 
EH
 
Total
Balance, December 31, 2017
 
$
31,141

 
$
24,811

 
$
55,952

Other(a)
 
213

 
228

 
441

Balance, April 1, 2018
 
$
31,355

 
$
25,039

 
$
56,393


(a) 
Primarily reflects the impact of foreign exchange.
v3.8.0.1
Pension and Postretirement Benefit Plans
 3 Months Ended
Apr. 01, 2018
Retirement Benefits [Abstract]  
Pension and Postretirement Benefit Plans
Pension and Postretirement Benefit Plans
The following table provides the components of net periodic benefit cost/(income):
 
 
Three Months Ended
 
 
Pension Plans
 
 
 
 
U.S.
Qualified
 
U.S.
Supplemental
(Non-Qualified)
 
International
 
Postretirement
Plans
(MILLIONS OF DOLLARS)
 
April 1, 2018

 
April 2, 2017

 
April 1, 2018

 
April 2, 2017

 
April 1, 2018

 
April 2, 2017

 
April 1, 2018

 
April 2, 2017

Net periodic benefit cost/(credit)(a):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Service cost(b)
 
$
—

 
$
68

 
$
—

 
$
6

 
$
37

 
$
41

 
$
10

 
$
11

Interest cost
 
151

 
162

 
13

 
14

 
54

 
50

 
18

 
23

Expected return on plan assets
 
(263
)
 
(259
)
 
—

 
—

 
(92
)
 
(84
)
 
(9
)
 
(9
)
Amortization of:
 
 

 
 

 
 

 
 

 
 
 
 

 
 

 
 

Actuarial losses(b)
 
30

 
115

 
4

 
13

 
26

 
28

 
2

 
8

Prior service costs(credits)
 
—

 
2

 
—

 
—

 
(1
)
 
(1
)
 
(45
)
 
(46
)
Curtailments
 
2

 
5

 
—

 
—

 
—

 
—

 
(7
)
 
(7
)
Settlements
 
20

 
31

 
17

 
21

 
—

 
1

 
—

 
—

 
 
$
(58
)
 
$
124

 
$
33

 
$
53

 
$
24

 
$
35

 
$
(31
)
 
$
(21
)

(a) 
We adopted a new accounting standard on January 1, 2018 that requires the net periodic pension and postretirement benefit costs other than service costs be presented in Other (income)/deductions––net on the condensed consolidated statements of income. For additional information, see Note 1B and Note 4.
(b) 
Effective January 1, 2018, we froze two significant defined benefit pension plans to future benefit accruals in the U.S. and U.K. and as a result, service costs for those plans are eliminated. In addition, due to the plan freeze, the average amortization period for the U.S. qualified plans and U.S. supplemental (non-qualified) plans was extended to the expected life expectancy of the plan participants, whereas the average amortization period in prior years utilized the expected future service period of plan participants.
As of and for the three months ended April 1, 2018, we contributed and in 2018 expect to contribute from our general assets as follows:
 
 
Pension Plans
 
 
(MILLIONS OF DOLLARS)
 
U.S. Qualified
 
U.S. Supplemental (Non-Qualified)
 
International
 
Postretirement Plans
Contributions from our general assets for the three months ended April 1, 2018
 
$
500

 
$
84

 
$
37

 
$
37

Expected contributions from our general assets during 2018(a)
 
500

 
160

 
229

 
163

(a) 
Contributions expected to be made for 2018 are inclusive of amounts contributed during the three months ended April 1, 2018, including the $500 million voluntary contribution that was made in February 2018 for the U.S. qualified plans, which was considered pre-funding for future anticipated mandatory contributions and is also expected to reduce Pension Benefit Guaranty Corporation variable rate premiums. The U.S. supplemental (non-qualified) pension plan, international pension plan and the postretirement plan contributions from our general assets include direct employer benefit payments.
v3.8.0.1
Earnings Per Common Share Attributable to Common Shareholders
 3 Months Ended
Apr. 01, 2018
Earnings Per Share [Abstract]  
Earnings Per Common Share Attributable to Common Shareholders
Earnings Per Common Share Attributable to Common Shareholders
The following table provides the detailed calculation of EPS:
 
 
Three Months Ended
(IN MILLIONS)
 
April 1,
2018

 
April 2,
2017

EPS Numerator––Basic
 
 
 
 
Income from continuing operations
 
$
3,571

 
$
3,130

Less: Net income attributable to noncontrolling interests
 
9

 
9

Income from continuing operations attributable to Pfizer Inc.
 
3,562

 
3,121

Less: Preferred stock dividends––net of tax
 
—

 
—

Income from continuing operations attributable to Pfizer Inc. common shareholders
 
3,562

 
3,121

Discontinued operations––net of tax
 
(1
)
 
—

Net income attributable to Pfizer Inc. common shareholders
 
$
3,560

 
$
3,121

EPS Numerator––Diluted
 
 

 
 

Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions
 
$
3,562

 
$
3,121

Discontinued operations––net of tax, attributable to Pfizer Inc. common shareholders and assumed conversions
 
(1
)
 
—

Net income attributable to Pfizer Inc. common shareholders and assumed conversions
 
$
3,561

 
$
3,121

EPS Denominator
 
 

 
 

Weighted-average number of common shares outstanding––Basic
 
5,957

 
6,006

Common-share equivalents: stock options, stock issuable under employee compensation plans, convertible preferred stock and accelerated share repurchase agreements
 
100

 
86

Weighted-average number of common shares outstanding––Diluted
 
6,057

 
6,092

Stock options that had exercise prices greater than the average market price of our common stock issuable under employee compensation plans(a)
 
2

 
48

(a) 
These common stock equivalents were outstanding for the periods presented, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
v3.8.0.1
Contingencies and Certain Commitments
 3 Months Ended
Apr. 01, 2018
Commitments and Contingencies Disclosure [Abstract]  
Contingencies and Certain Commitments
Contingencies and Certain Commitments

We and certain of our subsidiaries are subject to numerous contingencies arising in the ordinary course of business, including tax and legal contingencies. For a discussion of our tax contingencies, see Note 5C. For a discussion of our legal contingencies, see below.
A. Legal Proceedings

Our legal contingencies include, but are not limited to, the following:
•
Patent litigation, which typically involves challenges to the coverage and/or validity of patents on various products, processes or dosage forms. We are the plaintiff in the majority of these actions. An adverse outcome in actions in which we are the plaintiff could result in loss of patent protection for a drug, a significant loss of revenues from that drug or impairment of the value of associated assets.
•
Product liability and other product-related litigation, which can include personal injury, consumer, off-label promotion, securities, antitrust and breach of contract claims, among others, often involves highly complex issues relating to medical causation, label warnings and reliance on those warnings, scientific evidence and findings, actual, provable injury and other matters.
•
Commercial and other matters, which can include merger-related and product-pricing claims and environmental claims and proceedings, can involve complexities that will vary from matter to matter.
•
Government investigations, which often are related to the extensive regulation of pharmaceutical companies by national, state and local government agencies in the U.S. and in other jurisdictions. 

Certain of these contingencies could result in losses, including damages, fines and/or civil penalties, which could be substantial, and/or criminal charges.

We believe that our claims and defenses in matters in which we are a defendant are substantial, but litigation is inherently unpredictable and excessive verdicts do occur. We do not believe that any of these matters will have a material adverse effect on our financial position. However, we could incur judgments, enter into settlements or revise our expectations regarding the outcome of certain matters, and such developments could have a material adverse effect on our results of operations in the period in which the amounts are accrued and/or our cash flows in the period in which the amounts are paid.

We have accrued for losses that are both probable and reasonably estimable. Substantially all of our contingencies are subject to significant uncertainties and, therefore, determining the likelihood of a loss and/or the measurement of any loss can be complex. Consequently, we are unable to estimate the range of reasonably possible loss in excess of amounts accrued. Our assessments are based on estimates and assumptions that have been deemed reasonable by management, but the assessment process relies heavily on estimates and assumptions that may prove to be incomplete or inaccurate, and unanticipated events and circumstances may occur that might cause us to change those estimates and assumptions.

Amounts recorded for legal and environmental contingencies result from a complex series of judgments about future events and uncertainties and rely heavily on estimates and assumptions.

The principal pending matters to which we are a party are discussed below. In determining whether a pending matter is a principal matter, we consider both quantitative and qualitative factors in order to assess materiality, such as, among other things, the amount of damages and the nature of any other relief sought in the proceeding, if such damages and other relief are specified; our view of the merits of the claims and of the strength of our defenses; whether the action purports to be, or is, a class action and, if not certified, our view of the likelihood that a class will be certified by the court; the jurisdiction in which the proceeding is pending; whether related actions have been transferred to multidistrict litigation; any experience that we or, to our knowledge, other companies have had in similar proceedings; whether disclosure of the action would be important to a reader of our financial statements, including whether disclosure might change a reader’s judgment about our financial statements in light of all of the information that is available to the reader; the potential impact of the proceeding on our reputation; and the extent of public interest in the matter. In addition, with respect to patent matters in which we are the plaintiff, we consider, among other things, the financial significance of the product protected by the patent(s) at issue. As a result of considering qualitative factors in our determination of principal matters, there are some matters discussed below with respect to which management believes that the likelihood of possible loss in excess of amounts accrued is remote.
A1. Legal Proceedings––Patent Litigation

Like other pharmaceutical companies, we are involved in numerous suits relating to our patents, including but not limited to, those discussed below. Most of the suits involve claims by generic drug manufacturers that patents covering our products, processes or dosage forms are invalid and/or do not cover the product of the generic drug manufacturer. Also, counterclaims, as well as various independent actions, have been filed alleging that our assertions of, or attempts to enforce, patent rights with respect to certain products constitute unfair competition and/or violations of antitrust laws. In addition to the challenges to the U.S. patents on a number of our products that are discussed below, patent rights to certain of our products are being challenged in various other jurisdictions. We are also party to patent damages suits in various jurisdictions pursuant to which generic drug manufacturers, payers, governments or other parties are seeking damages from us for alleged delay of generic entry. Additionally, our licensing and collaboration partners face challenges by generic drug manufacturers to patents covering products for which we have licenses or co-promotion rights. We also are often involved in other proceedings, such as inter partes review, post-grant review, re-examination or opposition proceedings, before the U.S. Patent and Trademark Office, the European Patent Office, or other foreign counterparts relating to our intellectual property or the intellectual property rights of others. Also, if one of our patents is found to be invalid by such proceedings, generic or competitive products could be introduced into the market resulting in the erosion of sales of our existing products. For example, several of the patents in our pneumococcal vaccine portfolio have been challenged in inter partes review and post-grant review proceedings in the United States. The invalidation of these patents could potentially allow a competitor pneumococcal vaccine into the marketplace. We are also subject to patent litigation pursuant to which one or more third parties seeks damages and/or injunctive relief to compensate for alleged infringement of its patents by our commercial or other activities. For example, our Hospira subsidiaries are involved in patent and patent-related disputes over their attempts to bring generic pharmaceutical and biosimilar products to market. If one of our marketed products is found to infringe valid patent rights of a third party, such third party may be awarded significant damages, or we may be prevented from further sales of that product. Such damages may be enhanced as much as three-fold in the event that we or one of our subsidiaries, like Hospira, is found to have willfully infringed valid patent rights of a third party.

Actions In Which We Are The Plaintiff
Bosulif (bosutinib)
In December 2016, Wyeth LLC, Wyeth Pharmaceuticals Inc., and PF Prism C.V. (collectively, Wyeth) brought a patent-infringement action against Alembic Pharmaceuticals, Ltd, Alembic Pharmaceuticals, Inc. (collectively, Alembic), Sun Pharmaceutical Industries, Inc., and Sun Pharmaceutical Industries Limited (collectively, Sun), in the U.S. District Court for the District of Delaware in connection with abbreviated new drug applications respectively filed with the FDA by Alembic and Sun, each seeking approval to market generic versions of bosutinib. Alembic is challenging patents, which expire in 2026, covering polymorphic forms of bosutinib and methods of treating chronic myelogenous leukemia. Sun is challenging the patent covering polymorphic forms of bosutinib that expires in 2026. In March 2017, Wyeth brought a patent-infringement action against MSN Laboratories Private Limited and MSN Pharmaceuticals, Inc. (collectively, MSN), in the U.S. District Court for the District of Delaware in connection with an abbreviated new drug application filed with the FDA by MSN, seeking approval to market a generic version of bosutinib, and challenging a patent expiring in 2026 covering polymorphic forms of bosutinib. In September 2017, the case against MSN was dismissed. Also, in September 2017, Wyeth brought an additional patent-infringement action against Sun in the U.S. District Court for the District of Delaware asserting the infringement and validity of two other patents challenged by Sun, which expire in 2025 and 2026 respectively, covering compositions of bosutinib and methods of treating chronic myelogenous leukemia.
EpiPen
In July 2010, King, which we acquired in 2011 and is a wholly-owned subsidiary, brought a patent-infringement action against Sandoz in the U.S. District Court for the District of New Jersey in connection with Sandoz’s abbreviated new drug application filed with the FDA seeking approval to market an epinephrine injectable product. Sandoz is challenging patents, which expire in 2025, covering the next-generation autoinjector for use with epinephrine that is sold under the EpiPen brand name.
Precedex Premix
In June 2014, Ben Venue Laboratories, Inc. (Ben Venue) notified our subsidiary, Hospira, that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that a patent relating to the use of Precedex in an intensive care unit setting, which expires in March 2019, was invalid or not infringed. In August 2014, Hospira and Orion Corporation (co-owner of the patent that is the subject of the lawsuit) filed suit against Ben Venue, Hikma Pharmaceuticals PLC (Hikma), and West-Ward Pharmaceutical Corp. in the U.S. District Court for the District of Delaware asserting the validity and infringement of the patent. In October 2014, Eurohealth International Sarl was substituted for Ben Venue and Hikma. In June 2016, this case was settled on terms not material to Pfizer.
In June 2015, Amneal Pharmaceuticals LLC (Amneal) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that four patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In August 2015, Hospira filed suit against Amneal in the U.S. District Court for the District of Delaware asserting the validity and infringement of the patents that are the subject of the lawsuit. In January 2018, the District Court ruled that one of the four patents was valid and infringed, and that the other three patents were invalid. In February and March 2018, respectively, each of Amneal and Hospira appealed the District Court decision to the U.S. Court of Appeals for the Federal Circuit. 

In December 2015, Fresenius Kabi USA LLC (Fresenius) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that four patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In January 2016, Hospira filed suit against Fresenius in the U.S. District Court for the Northern District of Illinois asserting the validity and infringement of the patents that are the subject of the lawsuit.

In August 2016, Par Sterile Products, LLC (Par) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that four patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In September 2016, Hospira filed suit against Par in the U.S. District Court for the District of Delaware asserting the validity and infringement of the patents that are the subject of the lawsuit. In December 2016, the case was stayed pending the outcome of Hospira’s suit against Amneal (including all appeals).

In December 2017, Gland Pharma Limited (Gland) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that six patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In February 2018, Hospira filed suit against Gland in the U.S. District Court for the District of Delaware asserting the validity and infringement of four patents that are the subject of the lawsuit.

In December 2017, Jiangsu Hengrui Medicine Co., Ltd. (Hengrui) notified Hospira that it had filed an abbreviated new drug application with the FDA seeking approval to market a generic version of Hospira’s premix version of Precedex and containing allegations that six patents relating to the Precedex premix formulations and their use, all of which expire in 2032, were invalid or not infringed. In February 2018, Hospira filed suit against Hengrui in the U.S. District Court for the District of Delaware asserting the validity and infringement of four patents that are the subject of the lawsuit.

In February 2018, Baxter Healthcare Corporation (Baxter) filed a declaratory judgment action against Hospira in the U.S. District Court for the District of Delaware seeking a declaration of non-infringement of four patents relating to the Precedex premix formulations and their use. One of the patents included in the action expires in 2019 and the other three patents expire in 2032. In March 2018, Hospira filed a counterclaim for infringement of the patent expiring in 2019.
Xeljanz (tofacitinib)
In February 2017, we brought a patent-infringement action against MicroLabs USA Inc. and MicroLabs Ltd. (collectively, MicroLabs) in the U.S. District Court for the District of Delaware asserting the infringement and validity of three patents challenged by MicroLabs in its abbreviated new drug application seeking approval to market a generic version of tofacitinib 5 mg tablets. Of the three patents that are the subject of the lawsuit, one covers the active ingredient and expires in December 2025, the second covers an enantiomer of tofacitinib and expires in 2022, and the third covers a polymorphic form of tofacitinib and expires in 2023. Three other patents for Xeljanz expiring in December 2020 have not been challenged by MicroLabs.

Separately, also in February 2017, we brought a patent-infringement action against Sun Pharmaceutical Industries Ltd. in the U.S. District Court for the District of Delaware asserting the infringement and validity of our patent covering a polymorphic form of tofacitinib, expiring in 2023, that was challenged by Sun Pharmaceutical Industries Ltd. in its abbreviated new drug application seeking approval to market a generic version of tofacitinib 11 mg extended release tablets. In November 2017, we brought an additional patent-infringement action against Sun Pharmaceuticals Industries Ltd. in the U.S. District Court for the District of Delaware asserting the infringement and validity of another patent challenged by Sun Pharmaceuticals Industries Ltd, which covers the active ingredient and expires in December 2025.

In March 2017, we brought a patent-infringement action against Zydus Pharmaceuticals (USA) Inc. and Cadila Healthcare Ltd. (collectively, Zydus) in the U.S. District Court for the District of Delaware asserting the infringement and validity of the same three patents that are the subject of the action against MicroLabs, which Zydus challenged in its abbreviated new drug application seeking approval to market a generic version of tofacitinib 5 mg tablets.

Also in March 2017, we brought separate actions in the U.S. District Court for the District of Delaware against Prinston Pharmaceutical Inc., Zhejiang Huahai Pharmaceutical Co., Ltd., Huahai US Inc. and Solco Healthcare US, LLC (collectively Prinston) and against Breckenridge Pharmaceutical Inc., Pensa Pharma S.A. and Laboratorios Del Dr. Esteve, S.A. (collectively Breckenridge) on the two patents expiring in 2022 and 2023, respectively, that were challenged by Prinston and Breckenridge in their respective abbreviated new drug applications seeking approval to market generic versions of tofacitinib 5 mg tablets. In October 2017, we brought an additional patent-infringement action against Breckenridge in the U.S. District Court for the District of Delaware asserting the infringement and validity of four additional patents challenged by Breckenridge, three of which expire in December 2020 and one of which expires in December 2025. In March 2018, we brought another patent infringement action against Prinston in the U.S. District Court for the District of Delaware asserting the infringement and validity of an additional patent, which had been subsequently challenged by Prinston and which expires in December 2025.
Xtandi (enzalutamide)
In December 2016, Medivation and Medivation Prostate Therapeutics, Inc. (collectively, the Medivation Group); Astellas Pharma Inc., Astellas US LLC and Astellas Pharma US, Inc. (collectively, Astellas); and The Regents of the University of California filed patent-infringement suits in the U.S. District Court for the District of Delaware against Actavis Laboratories FL, Inc. and Actavis LLC (collectively, Actavis); Zydus; and Apotex Inc. and Apotex Corp. (collectively, Apotex) in connection with those companies’ respective abbreviated new drug applications filed with the FDA for approval to market generic versions of enzalutamide. The generic manufacturers are challenging patents, which expire as early as 2026, covering enzalutamide and treatments for prostate cancer. In May 2017, the Medivation Group filed a patent-infringement suit against Roxane Laboratories Inc. (Roxane) in the same court in connection with Roxane’s abbreviated new drug application with the FDA for approval to market a generic version of enzalutamide.

Matters Involving Our Collaboration/Licensing Partners
Toviaz (fesoterodine)––Inter-Partes Reviews
In January 2016, Mylan Pharmaceuticals and Mylan Laboratories (collectively, Mylan) filed petitions with the U.S. Patent and Trademark Office requesting inter partes reviews of five of the patents covering fesoterodine, the active ingredient in Toviaz: three composition-of-matter patents and a method-of-use patent that expire in 2019 and a patent covering salts of fesoterodine that expires in 2022. The patents are owned by UCB, and we have an exclusive, worldwide license to market Toviaz from UCB. In July 2016, the Patent Trial and Appeal Board agreed to institute inter partes reviews of all five patents. Amerigen Pharmaceuticals Limited (Amerigen), Alembic Pharmaceuticals Limited and Torrent Pharmaceuticals Limited have joined the inter partes reviews. In July 2017, the U.S. Patent and Trademark Office issued decisions upholding all five patents. In September 2017, Mylan and Amerigen appealed the U.S. Patent and Trademark Office decisions to the U.S. Court of Appeals for the Federal Circuit. In January 2018, Mylan withdrew its appeal.

Eliquis
In February, March, and April 2017, twenty-five generic companies sent BMS Paragraph-IV certification letters informing BMS that they had filed abbreviated new drug applications seeking approval of generic versions of Eliquis, challenging the validity and infringement of one or more of the three patents listed in the Orange Book for Eliquis. The patents currently are set to expire in 2019, 2026, and 2031. Eliquis has been jointly developed and is being commercialized by BMS and Pfizer. In April 2017, BMS and Pfizer filed patent-infringement actions against all generic filers in the U.S. District Court for the District of Delaware and the U.S. District Court for the District of West Virginia, asserting that each of the generic companies’ proposed products would infringe each of the patent(s) that each generic filer challenged. Some generic filers challenged only the 2031 patent, some challenged both the 2031 and 2026 patent, and one generic company challenged all three patents. We and BMS have settled with certain of the generic companies on terms not material to Pfizer, and we and BMS may settle with other generic companies in the future.

Bavencio (avelumab)
In July 2017, BMS, E.R. Squibb & Sons LLC, Ono Pharmaceutical Co. Ltd., and Tasuku Honjo brought a patent-infringement action in the U.S. District Court for the District of Delaware against Pfizer, Merck KGaA, and EMD Serono, alleging that Bavencio (avelumab) infringes one patent relating to methods for treating tumors with anti-PD-L1 antibodies, which expires in 2023.
Actions In Which We Are The Defendant
Inflectra (infliximab-dyyb)
In March 2015, Janssen and New York University, together, brought a patent-infringement action in the U.S. District Court for the District of Massachusetts against Hospira, Celltrion Healthcare Co. Ltd. and Celltrion Inc. alleging that infliximab-dyyb, to be marketed by Hospira in the U.S. under the brand name Inflectra, would infringe six patents relating to infliximab, its manufacture and use. Claims with respect to four of the patents were dismissed by the plaintiffs, leaving two patents at issue: the infliximab antibody patent and a patent relating to cell culture media. In January 2018, the antibody patent was declared invalid by the Court of Appeals for the Federal Circuit. Janssen’s action based on the cell culture media patent remains pending.
A2. Legal Proceedings––Product Litigation

Like other pharmaceutical companies, we are defendants in numerous cases, including but not limited to those discussed below, related to our pharmaceutical and other products. Plaintiffs in these cases seek damages and other relief on various grounds for alleged personal injury and economic loss.
Asbestos
Between 1967 and 1982, Warner-Lambert owned American Optical Corporation, which manufactured and sold respiratory protective devices and asbestos safety clothing. In connection with the sale of American Optical in 1982, Warner-Lambert agreed to indemnify the purchaser for certain liabilities, including certain asbestos-related and other claims. As of April 1, 2018, approximately 56,680 claims naming American Optical and numerous other defendants were pending in various federal and state courts seeking damages for alleged personal injury from exposure to asbestos and other allegedly hazardous materials. Warner-Lambert was acquired by Pfizer in 2000 and is a wholly-owned subsidiary of Pfizer. Warner-Lambert is actively engaged in the defense of, and will continue to explore various means of resolving, these claims.

Numerous lawsuits are pending against Pfizer in various federal and state courts seeking damages for alleged personal injury from exposure to products allegedly containing asbestos and other allegedly hazardous materials sold by Pfizer and certain of its previously owned subsidiaries.
There also are a small number of lawsuits pending in various federal and state courts seeking damages for alleged exposure to asbestos in facilities owned or formerly owned by Pfizer or its subsidiaries.

Effexor
Beginning in May 2011, actions, including purported class actions, were filed in various federal courts against Wyeth and, in certain of the actions, affiliates of Wyeth and certain other defendants relating to Effexor XR, which is the extended-release formulation of Effexor. The plaintiffs in each of the class actions seek to represent a class consisting of all persons in the U.S. and its territories who directly purchased, indirectly purchased or reimbursed patients for the purchase of Effexor XR or generic Effexor XR from any of the defendants from June 14, 2008 until the time the defendants’ allegedly unlawful conduct ceased. The plaintiffs in all of the actions allege delay in the launch of generic Effexor XR in the U.S. and its territories, in violation of federal antitrust laws and, in certain of the actions, the antitrust, consumer protection and various other laws of certain states, as the result of Wyeth fraudulently obtaining and improperly listing certain patents for Effexor XR in the Orange Book, enforcing certain patents for Effexor XR and entering into a litigation settlement agreement with a generic drug manufacturer with respect to Effexor XR. Each of the plaintiffs seeks treble damages (for itself in the individual actions or on behalf of the putative class in the purported class actions) for alleged price overcharges for Effexor XR or generic Effexor XR in the U.S. and its territories since June 14, 2008. All of these actions have been consolidated in the U.S. District Court for the District of New Jersey.
In October 2014, the District Court dismissed the direct purchaser plaintiffs’ claims based on the litigation settlement agreement but declined to dismiss the other direct purchaser plaintiff claims. In January 2015, the District Court entered partial final judgments as to all settlement agreement claims, including those asserted by direct purchasers and end-payer plaintiffs, which plaintiffs appealed to the U.S. Court of Appeals for the Third Circuit. In August 2017, the U.S. Court of Appeals for the Third Circuit reversed the District Court’s decisions and remanded the claims to the District Court.
Zoloft
A number of individual lawsuits and multi-plaintiff lawsuits have been filed against us and/or our subsidiaries in various federal and state courts alleging personal injury as a result of the purported ingestion of Zoloft. Among other types of actions, the Zoloft personal injury litigation includes actions alleging a variety of birth defects as a result of the purported ingestion of Zoloft by women during pregnancy. Plaintiffs in these birth-defect actions seek compensatory and punitive damages and the disgorgement of profits resulting from the sale of Zoloft. In April 2012, the federal birth-defect cases were transferred for consolidated pre-trial proceedings to a Multi-District Litigation (In re Zoloft Products Liability Litigation MDL-2342) in the U.S. District Court for the Eastern District of Pennsylvania. A number of plaintiffs have voluntarily dismissed their actions. In April 2016, the District Court granted our motion for summary judgment, dismissing the claims of almost all of the remaining plaintiffs. In May 2016, the plaintiffs appealed the District Court’s decision to the U.S. Court of Appeals for the Third Circuit. In June 2017, the U.S. Court of Appeals for the Third Circuit affirmed the District Court’s decision.
Lipitor

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Antitrust Actions
Beginning in November 2011, purported class actions relating to Lipitor were filed in various federal courts against, among others, Pfizer, certain affiliates of Pfizer, and, in most of the actions, Ranbaxy, Inc. (Ranbaxy) and certain affiliates of Ranbaxy. The plaintiffs in these various actions seek to represent nationwide, multi-state or statewide classes consisting of persons or entities who directly purchased, indirectly purchased or reimbursed patients for the purchase of Lipitor (or, in certain of the actions, generic Lipitor) from any of the defendants from March 2010 until the cessation of the defendants’ allegedly unlawful conduct (the Class Period). The plaintiffs allege delay in the launch of generic Lipitor, in violation of federal antitrust laws and/or state antitrust, consumer protection and various other laws, resulting from (i) the 2008 agreement pursuant to which Pfizer and Ranbaxy settled certain patent litigation involving Lipitor, and Pfizer granted Ranbaxy a license to sell a generic version of Lipitor in various markets beginning on varying dates, and (ii) in certain of the actions, the procurement and/or enforcement of certain patents for Lipitor. Each of the actions seeks, among other things, treble damages on behalf of the putative class for alleged price overcharges for Lipitor (or, in certain of the actions, generic Lipitor) during the Class Period. In addition, individual actions have been filed against Pfizer, Ranbaxy and certain of their affiliates, among others, that assert claims and seek relief for the plaintiffs that are substantially similar to the claims asserted and the relief sought in the purported class actions described above. These various actions have been consolidated for pre-trial proceedings in a Multi-District Litigation (In re Lipitor Antitrust Litigation MDL-2332) in the U.S. District Court for the District of New Jersey.

In September 2013 and 2014, the District Court dismissed with prejudice the claims by direct purchasers. In October and November 2014, the District Court dismissed with prejudice the claims of all other Multi-District Litigation plaintiffs. All plaintiffs have appealed the District Court’s orders dismissing their claims with prejudice to the U.S. Court of Appeals for the Third Circuit. In addition, the direct purchaser class plaintiffs appealed the order denying their motion to amend the judgment and for leave to amend their complaint to the U.S. Court of Appeals for the Third Circuit. In August 2017, the U.S. Court of Appeals for the Third Circuit reversed the District Court’s decisions and remanded the claims to the District Court.

Also, in January 2013, the State of West Virginia filed an action in West Virginia state court against Pfizer and Ranbaxy, among others, that asserts claims and seeks relief on behalf of the State of West Virginia and residents of that state that are substantially similar to the claims asserted and the relief sought in the purported class actions described above.
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Personal Injury Actions
A number of individual and multi-plaintiff lawsuits have been filed against us in various federal and state courts alleging that the plaintiffs developed type 2 diabetes as a result of the purported ingestion of Lipitor. Plaintiffs seek compensatory and punitive damages.
In February 2014, the federal actions were transferred for consolidated pre-trial proceedings to a Multi-District Litigation (In re Lipitor (Atorvastatin Calcium) Marketing, Sales Practices and Products Liability Litigation (No. II) MDL-2502) in the U.S. District Court for the District of South Carolina. Since 2016, certain cases in the Multi-District Litigation were remanded to certain state courts. In January 2017, the District Court granted our motion for summary judgment, dismissing substantially all of the remaining cases pending in the Multi-District Litigation. In January 2017, the plaintiffs appealed the District Court’s decision to the U.S. Court of Appeals for the Fourth Circuit.
Viagra
A number of individual and multi-plaintiff lawsuits have been filed against us in various federal and state courts alleging that the plaintiffs developed melanoma and/or the exacerbation of melanoma as a result of the purported ingestion of Viagra. Plaintiffs seek compensatory and punitive damages.
In April 2016, the federal actions were transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In Re: Viagra (Sildenafil Citrate) Products Liability Litigation, MDL-2691) in the U.S. District Court for the Northern District of California. In December 2016, federal actions filed against Lilly and filed against both us and Lilly, were transferred for coordinated pre-trial proceedings to the Multi-District Litigation (In re: Viagra (Sildenafil Citrate) and Cialis (Tadalafil) Products Liability Litigation, MDL-2691).
Celebrex
Beginning in July 2014, purported class actions were filed in the U.S. District Court for the Eastern District of Virginia against Pfizer and certain subsidiaries of Pfizer relating to Celebrex. The plaintiffs seek to represent U.S. nationwide or multi-state classes consisting of persons or entities who directly purchased from the defendants, or indirectly purchased or reimbursed patients for some or all of the purchase price of, Celebrex or generic Celebrex from May 31, 2014 until the cessation of the defendants’ allegedly unlawful conduct. The plaintiffs allege delay in the launch of generic Celebrex in violation of federal antitrust laws or certain state antitrust, consumer protection and various other laws as a result of Pfizer fraudulently obtaining and improperly listing a patent on Celebrex, engaging in sham litigation and prolonging the impact of sham litigation through settlement activity that further delayed generic entry. Each of the actions seeks treble damages on behalf of the putative class for alleged price overcharges for Celebrex since May 31, 2014. In December 2014, the District Court granted the parties’ joint motions to consolidate the direct purchaser and end-payer cases, and all such cases were consolidated as of March 2015. In October 2014 and March 2015, we filed motions to dismiss the direct purchasers’ and end-payers’ amended complaints, respectively. In November 2015, the District Court denied in part and granted in part our motion to dismiss the direct purchasers’ amended complaint. In February 2016, the District Court denied in part and granted in part our motion to dismiss the end-payers’ amended complaint, and in August 2016, the District Court dismissed substantially all of the end-payer’s remaining claims. In February 2017, the District Court dismissed with prejudice all of the end-payers’ claims. In March 2017, the end-payers appealed the District Court’s order dismissing their claims with prejudice to the U.S. Court of Appeals for the Fourth Circuit. In August 2017, the District Court granted the direct purchasers’ motion for class certification. In November 2017, Pfizer and the direct purchasers entered into an agreement to resolve the direct purchasers’ class action for $94 million. In April 2018, the court approved the agreement. In November 2017, Pfizer and the end-payers entered into an agreement to resolve the claims of the end-payer plaintiffs on terms not material to Pfizer.
Intravenous Solutions
Beginning in November 2016, purported class actions were filed in the U.S. District Court for the Northern District of Illinois against Hospira, Hospira Worldwide, Inc. and certain other defendants relating to intravenous saline solution. Plaintiffs seek to represent a class consisting of all persons and entities in the U.S. who directly purchased intravenous saline solution sold by any of the defendants from January 1, 2013 until the time the defendants’ allegedly unlawful conduct ceases. Plaintiffs allege that the defendants’ conduct restricts output and artificially fixes, raises, maintains and/or stabilizes the prices of intravenous saline solution sold throughout the U.S. in violation of federal antitrust laws. Plaintiffs seek treble damages (for themselves and on behalf of the putative classes) and an injunction against defendants for alleged price overcharges for intravenous saline solution in the U.S. since January 1, 2013. All of these actions have been consolidated in the U.S. District Court for the Northern District of Illinois. On February 3, 2017, we completed the sale of our global infusion systems net assets, HIS, which includes intravenous saline solution, to ICU Medical. The litigation is the subject of cross-claims for indemnification by both Pfizer and ICU Medical under the purchase agreement.
Separately, in April 2017, Pfizer, Hospira and two employees of Pfizer received grand jury subpoenas issued by the United States District Court for the Eastern District of Pennsylvania, in connection with an investigation by the U.S. Department of Justice, Antitrust Division. The subpoenas seek documents related to the sale, manufacture, pricing and shortages of intravenous solutions, including saline, as well as communications among industry participants regarding these issues. The Department of Justice investigation is also the subject of cross-claims for indemnification by both Pfizer and ICU Medical under the purchase agreement. In addition, in August 2015, the New York Attorney General issued a subpoena to Hospira for similar information. Hospira has produced records to the New York Attorney General and is coordinating with ICU Medical to produce records to the New York Attorney General as appropriate going forward, and Hospira and Pfizer are coordinating with ICU Medical to produce records to the Department of Justice.
Hormone Therapy Consumer Class Action
A certified consumer class action is pending against Wyeth in the U.S. District Court for the Southern District of California based on the alleged off-label marketing of its hormone therapy products. The case was originally filed in December 2003. The class consists of California consumers who purchased Wyeth’s hormone-replacement products between January 1995 and January 2003 and who do not seek personal injury damages therefrom. The class seeks compensatory and punitive damages, including a full refund of the purchase price.
Eliquis
A number of individual and multi-plaintiff lawsuits have been filed against us and BMS in various federal and state courts pursuant to which plaintiffs seek to recover for personal injuries, including wrongful death, due to bleeding as a result of the alleged ingestion of Eliquis. Plaintiffs seek compensatory and punitive damages.
In February 2017, the federal actions were transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In Re: Eliquis (Apixaban) Products Liability Litigation MDL-2754) in the U.S. District Court for the Southern District of New York. In July 2017, the District Court dismissed substantially all of the actions that were pending in the Multi-District Litigation. In August 2017, certain plaintiffs appealed the District Court’s dismissal to the U.S. Court of Appeals for the Second Circuit. Additional cases continue to be transferred to the Multi-District Litigation.
EpiPen
Beginning in February 2017, purported class actions were filed in various federal courts by indirect purchasers of EpiPen against Pfizer, and/or its affiliates King and Meridian, and/or various entities affiliated with Mylan N.V., and Mylan N.V. Chief Executive Officer, Heather Bresch. The plaintiffs in these actions seek to represent U.S. nationwide classes comprising persons or entities who paid for any portion of the end-user purchase price of an EpiPen between 2009 until the cessation of the defendants’ allegedly unlawful conduct. In August 2017, a similar lawsuit brought on behalf of a purported class of direct purchaser plaintiffs against Pfizer, King, Meridian and Mylan was voluntarily dismissed without prejudice. Against Pfizer and/or its affiliates, plaintiffs generally allege that Pfizer’s and/or its affiliates’ settlement of patent litigation regarding EpiPen delayed market entry of generic EpiPen in violation of federal antitrust laws and various state antitrust or consumer protection laws. At least one lawsuit also alleges that Pfizer and/or Mylan N.V. violated the federal Racketeer Influenced and Corrupt Organizations Act. Plaintiffs also filed various consumer protection and unjust enrichment claims against, and relating to conduct attributable solely to, Mylan Pharmaceuticals regarding EpiPen. Plaintiffs seek treble damages for alleged overcharges for EpiPen since 2009. In August 2017, the actions were consolidated for coordinated pre-trial proceedings in a Multi-District Litigation (In re: EpiPen (Epinephrine Injection, USP) Marketing, Sales Practices and Antitrust Litigation, MDL-2785) in the U.S. District Court for the District of Kansas with other EpiPen-related actions against Mylan N.V. and/or its affiliates to which Pfizer, King and Meridian are not parties.
Nexium 24HR and Protonix
A number of individual and multi-plaintiff lawsuits have been filed against Pfizer, certain of its subsidiaries and/or other pharmaceutical manufacturers in various federal and state courts alleging that the plaintiffs developed kidney-related injuries as a result of the purported ingestion of certain proton pump inhibitors. The cases against us involve Nexium 24HR and/or Protonix and seek compensatory and punitive damages and, in some cases, treble damages, restitution or disgorgement. In August 2017, the federal actions were ordered transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In re: Proton-Pump Inhibitor Products Liability Litigation (No. II)) in the U.S. District Court for the District of New Jersey.
Docetaxel 
A number of lawsuits have been filed against Hospira and Pfizer in various federal and state courts alleging that plaintiffs who were treated with Docetaxel developed permanent hair loss. The significant majority of the cases also name other defendants, including the manufacturer of the branded product, Taxotere. Plaintiffs seek compensatory and punitive damages.
In October 2016, the federal cases were transferred for coordinated pre-trial proceedings to a Multi-District Litigation (In re Taxotere (Docetaxel) Products Liability Litigation, MDL-2740) in the U.S. District Court for the Eastern District of Louisiana.
A3. Legal Proceedings––Commercial and Other Matters
Average Wholesale Price Litigation
Pfizer, certain of its subsidiaries and other pharmaceutical manufacturers were sued in various state courts by a number of states alleging that the defendants provided average wholesale price (AWP) information for certain of their products that was higher than the actual average prices at which those products were sold. The AWP is used to determine reimbursement levels under Medicare Part B and Medicaid and in many private-sector insurance policies and medical plans. All but one of those actions have been resolved through settlement, dismissal or final judgment. The plaintiff state, Illinois, in the one remaining action claims that the alleged spread between the AWPs at which purchasers were reimbursed and the actual sale prices was promoted by the defendants as an incentive to purchase certain of their products. The action alleges, among other things, fraud and violation of the state’s unfair trade practices and consumer protection statutes and seeks monetary and other relief, including civil penalties and treble damages.

Monsanto-Related Matters
In 1997, Monsanto Company (Former Monsanto) contributed certain chemical manufacturing operations and facilities to a newly formed corporation, Solutia Inc. (Solutia), and spun off the shares of Solutia. In 2000, Former Monsanto merged with Pharmacia & Upjohn Company to form Pharmacia. Pharmacia then transferred its agricultural operations to a newly created subsidiary, named Monsanto Company (New Monsanto), which it spun off in a two-stage process that was completed in 2002. Pharmacia was acquired by Pfizer in 2003 and is a wholly-owned subsidiary of Pfizer.
In connection with its spin-off that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities related to Pharmacia’s former agricultural business. New Monsanto has defended and/or is defending Pharmacia in connection with various claims and litigation arising out of, or related to, the agricultural business, and has been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.
In connection with its spin-off in 1997, Solutia assumed, and agreed to indemnify Pharmacia for, liabilities related to Former Monsanto’s chemical businesses. As the result of its reorganization under Chapter 11 of the U.S. Bankruptcy Code, Solutia’s indemnification obligations relating to Former Monsanto’s chemical businesses are primarily limited to sites that Solutia has owned or operated. In addition, in connection with its spinoff that was completed in 2002, New Monsanto assumed, and agreed to indemnify Pharmacia for, any liabilities primarily related to Former Monsanto’s chemical businesses, including, but not limited to, any such liabilities that Solutia assumed. Solutia’s and New Monsanto’s assumption of, and agreement to indemnify Pharmacia for, these liabilities apply to pending actions and any future actions related to Former Monsanto’s chemical businesses in which Pharmacia is named as a defendant, including, without limitation, actions asserting environmental claims, including alleged exposure to polychlorinated biphenyls. Solutia and/or New Monsanto are defending Pharmacia in connection with various claims and litigation arising out of, or related to, Former Monsanto’s chemical businesses, and have been indemnifying Pharmacia when liability has been imposed or settlement has been reached regarding such claims and litigation.
Environmental Matters
In 2009, we submitted to the U.S. Environmental Protection Agency (EPA) a corrective measures study report with regard to Pharmacia’s discontinued industrial chemical facility in North Haven, Connecticut and a revised site-wide feasibility study with regard to Wyeth Holdings Corporation’s discontinued industrial chemical facility in Bound Brook, New Jersey. In September 2010, our corrective measures study report with regard to the North Haven facility was approved by the EPA, and we commenced construction of the site remedy in late 2011 under an Updated Administrative Order on Consent with the EPA. In July 2011, Wyeth Holdings Corporation finalized an Administrative Settlement Agreement and Order on Consent for Removal Action (the 2011 Administrative Settlement Agreement) with the EPA with regard to the Bound Brook facility. In May 2012, we completed construction of an interim remedy to address the discharge of impacted groundwater from that facility to the Raritan River. In September 2012, the EPA issued a final remediation plan for the Bound Brook facility’s main plant area, which is generally in accordance with one of the remedies evaluated in our revised site-wide feasibility study. In March 2013, Wyeth Holdings Corporation (now Wyeth Holdings LLC) entered into an Administrative Settlement Agreement and Order on Consent with the EPA to allow us to undertake detailed engineering design of the remedy for the main plant area and to perform a focused feasibility study for two adjacent lagoons. In September 2015, the U.S., on behalf of the EPA, lodged a complaint and consent decree with the federal District Court for the District of New Jersey that allows Wyeth Holdings LLC to complete the design and to implement the remedy for the main plant area. In December 2015, the consent decree (which supersedes the 2011 Administrative Settlement Agreement) was entered by the District Court. We have accrued for the estimated costs of the site remedy for the North Haven facility and the site remediation for the Bound Brook facility.

We are a party to a number of other proceedings brought under the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, and other state, local or foreign laws in which the primary relief sought is the cost of past and/or future remediation.
Contracts with Iraqi Ministry of Health
In October 2017, a number of United States service members, civilians, and their families brought a complaint in the Federal District Court for the District of Columbia against a number of pharmaceutical and medical devices companies, including Pfizer and certain of its subsidiaries, alleging that the defendants violated the United States Anti-Terrorism Act. The complaint alleges that the defendants provided funding for terrorist organizations through their sales practices pursuant to pharmaceutical and medical device contracts with the Iraqi Ministry of Health, and seeks monetary relief.
A4. Legal Proceedings––Government Investigations

Like other pharmaceutical companies, we are subject to investigations and extensive regulation by government agencies in the U.S., other developed markets and multiple emerging markets in which we operate. As a result, we have interactions with government agencies on an ongoing basis. Criminal charges, and substantial fines and/or civil penalties, as well as limitations on our ability to conduct business in applicable jurisdictions, could result from government investigations. Among the investigations by government agencies are the matters discussed below.
Phenytoin Sodium Capsules
In 2012, Pfizer sold the U.K. Marketing Authorisation for phenytoin sodium capsules to a third party, but retained the right to supply the finished product to that third party. In May 2013, the U.K. Competition & Markets Authority (CMA) informed us that it had launched an investigation into the supply of phenytoin sodium capsules in the U.K. market. In August 2015, the CMA issued a Statement of Objections alleging that Pfizer and Pfizer Limited, a U.K. subsidiary, engaged in conduct that violates U.K. and EU antitrust laws. In December 2016, the CMA imposed a £84.2 million fine on Pfizer and Pfizer Limited. Pfizer appealed the CMA Decision to The Competition Appeal Tribunal in February 2017.
Civil Investigative Demand relating to Pharmacy Benefit Managers
In March 2016, Pfizer received a Civil Investigative Demand from the U.S. Attorney’s Office for the Southern District of New York related to Pfizer’s contractual relationships with pharmacy benefit managers with respect to certain pharmaceutical products over the period from January 1, 2006 to the present. We have provided information to the government in response to this Civil Investigative Demand.
Subpoenas relating to Copayment Assistance Organizations
In December 2015 and July 2016, Pfizer received subpoenas from the U.S. Attorney’s Office for the District of Massachusetts requesting documents related to the Patient Access Network Foundation and other 501(c)(3) organizations that provide financial assistance to Medicare patients. We have  been discussing a potential resolution of the matter with the government.
Greenstone Investigations
As of July 2017, the U.S. Department of Justice’s Antitrust Division is investigating our Greenstone generics business. We believe this is related to an ongoing antitrust investigation of the generic pharmaceutical industry. The government has been obtaining information from Greenstone. In April 2018, Greenstone received requests for information from the Antitrust Department of the Connecticut Office of the Attorney General. We will be providing information pursuant to these requests.
Intravenous Solutions
See Note 12A2. Legal Proceedings––Product Litigation––Intravenous Solutions above for information regarding government investigations related to sales of intravenous solution products.
B. Guarantees and Indemnifications
In the ordinary course of business and in connection with the sale of assets and businesses and other transactions, we often indemnify our counterparties against certain liabilities that may arise in connection with the transaction or that are related to events and activities prior to or following a transaction. If the indemnified party were to make a successful claim pursuant to the terms of the indemnification, we may be required to reimburse the loss. These indemnifications are generally subject to various restrictions and limitations. Historically, we have not paid significant amounts under these provisions and, as of April 1, 2018 the estimated fair value of these indemnification obligations was not significant.
Pfizer Inc. has also guaranteed the long-term debt of certain companies that it acquired and that now are subsidiaries of Pfizer.
C. Certain Commitments
•
Accelerated share repurchase agreement––On March 12, 2018, we entered into an accelerated share repurchase agreement with Citibank to repurchase $4.0 billion of our common stock. Pursuant to the terms of the agreement, on March 14, 2018, we paid $4.0 billion to Citibank and received an initial delivery of approximately 87 million shares of our common stock from Citibank at a price of $36.61 per share, which represented, based on the closing price of our common stock on the NYSE on March 12, 2018, approximately 80% of the notional amount of the accelerated share repurchase agreement. As of April 1, 2018, the common stock received is included in Treasury stock. At settlement of the agreement, which is expected to occur during or prior to the third quarter of 2018, Citibank may be required to deliver additional shares of common stock to us, or, under certain circumstances, we may be required to deliver shares of our common stock or may elect to make a cash payment to Citibank, with the number of shares to be delivered or the amount of such payment, as well as the final average price per share, based on the difference between the volume-weighted average price, less a discount, of Pfizer’s common stock during the term of the transaction. This agreement was entered into pursuant to our previously announced share repurchase authorization. After giving effect to the accelerated share repurchase agreement, as well as other share repurchases through April 1, 2018, our remaining share-purchase authorization was approximately $10.3 billion at April 1, 2018.
•
Approval in the EU of Mylotarg––Mylotarg was developed, in part, through a research arrangement with a third party. Mylotarg was approved in the EU in April 2018 for the treatment of acute myeloid leukemia, and, as a result, we incurred an obligation for fixed payments over a 10-year period aggregating $301 million.
v3.8.0.1
Segment, Geographic and Other Revenue Information
 3 Months Ended
Apr. 01, 2018
Segment Reporting [Abstract]  
Segment, Geographic and Other Revenue Information
Segment, Geographic and Other Revenue Information

A. Segment Information

We manage our commercial operations through two distinct business segments: Pfizer Innovative Health (IH) and Pfizer Essential Health (EH). The IH and EH segments are each led by a single manager. Each operating segment has responsibility for its commercial activities and for certain IPR&D projects for new investigational products and additional indications for in-line products that generally have achieved proof-of-concept. Each business has a geographic footprint across developed and emerging markets. Our chief operating decision maker uses the revenues and earnings of the two operating segments, among other factors, for performance evaluation and resource allocation.
We regularly review our segments and the approach used by management for performance evaluation and resource allocation.
As described in Note 1A, the sale of HIS impacted our results of operations in 2017.
Operating Segments
Some additional information about our business segments as of April 1, 2018 follows:
innovativehealthrgb.jpg
 
pehlogo.jpg
IH focuses on developing and commercializing novel, value-creating medicines and vaccines that significantly improve patients’ lives, as well as products for consumer healthcare.
Key therapeutic areas include internal medicine, vaccines, oncology, inflammation & immunology, rare disease and consumer healthcare.
 
EH includes legacy brands that have lost or will soon lose market exclusivity in both developed and emerging markets, branded and generic sterile injectable products, biosimilars, and select branded products including anti-infectives. EH also includes an R&D organization, as well as our contract manufacturing business.
Through February 2, 2017, EH also included HIS.

Leading brands include:
- Prevnar 13/Prevenar 13
- Xeljanz
- Eliquis
- Lyrica (U.S., Japan and certain other markets)
- Enbrel (outside the U.S. and Canada)
- Ibrance
- Xtandi
- Several OTC consumer healthcare products (e.g., Advil and
  Centrum)
 

Leading brands include:
- Lipitor
- Premarin family
- Norvasc
- Lyrica (Europe, Russia, Turkey, Israel and Central Asia countries)
- Celebrex
- Viagra*
- Inflectra/Remsima
- Several sterile injectable products
*
Viagra lost exclusivity in the U.S. in December 2017. Beginning in 2018, revenues for Viagra in the U.S. and Canada, which were reported in IH through 2017, are reported in EH (which reported all other Viagra revenues excluding the U.S. and Canada through 2017). Therefore, total Viagra worldwide revenues are reported in EH from the first quarter of 2018 forward.
The following organizational change impacted our operating segments in 2018:
•
Effective in the first quarter of 2018, certain costs for Pfizer’s StratCO group, which were previously reported in the operating results of our operating segments and Corporate, are reported in Other Unallocated. StratCO costs primarily include headcount, vendor costs and data costs largely in support of Pfizer’s commercial operations. The majority of the StratCO costs reflect additional amounts that our operating segments may have generally incurred had each segment operated as a standalone company during the period presented. The reporting change was made to streamline accountability and speed decision making. In the first quarter of 2017, we reclassified approximately $98 million of costs from IH, approximately $33 million of costs from EH and approximately $9 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.
Other Costs and Business Activities
Certain pre-tax costs are not allocated to our operating segment results, such as costs associated with the following:
•
WRD, which is generally responsible for research projects for our IH business until proof-of-concept is achieved and then for transitioning those projects to the IH segment via the GPD organization for possible clinical and commercial development. R&D spending may include upfront and milestone payments for intellectual property rights. The WRD organization also has responsibility for certain science-based and other platform-services organizations, which provide technical expertise and other services to the various R&D projects, including EH R&D projects. WRD is also responsible for facilitating all regulatory submissions and interactions with regulatory agencies, including all safety-event activities.
•
GPD, which is generally responsible for the clinical development of assets that are in clinical trials for our WRD and Innovative portfolios. GPD also provides technical support and other services to Pfizer R&D projects.
•
Corporate, representing platform functions (such as worldwide technology, global real estate operations, legal, finance, human resources, worldwide public affairs, compliance and worldwide procurement), the provision of medical information to healthcare providers, patients and other parties, transparency and disclosure activities, clinical trial results publication, grants for healthcare quality improvement and medical education, and partnerships with global public health and medical associations, as well as certain compensation and other corporate costs, such as interest income and expense, and gains and losses on investments. Effective in the first quarter of 2018, certain costs for StratCO, which were previously reported in the operating results of our operating segments and Corporate, are reported in Other Unallocated. For additional information, see note below on Other unallocated costs.
•
Other unallocated costs, representing overhead expenses associated with our manufacturing and commercial operations that are not directly assessed to an operating segment, as business unit (segment) management does not manage these costs (which include manufacturing variances associated with production). In connection with the StratCO reporting change, in the first quarter of 2017, we reclassified approximately $98 million of costs from IH, approximately $33 million of costs from EH and approximately $9 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.
•
Certain transactions and events such as (i) purchase accounting adjustments, where we incur expenses associated with the amortization of fair value adjustments to inventory, intangible assets and PP&E; (ii) acquisition-related costs, where we incur costs for executing the transaction, integrating the acquired operations and restructuring the combined company; and (iii) certain significant items, representing substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) that are evaluated on an individual basis by management and that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis. Such items can include, but are not limited to, non-acquisition-related restructuring costs, as well as costs incurred for legal settlements, asset impairments and disposals of assets or businesses, including, as applicable, any associated transition activities.
Segment Assets

We manage our assets on a total company basis, not by operating segment, as many of our operating assets are shared (such as our plant network assets) or commingled (such as accounts receivable, as many of our customers are served by both operating segments). Therefore, our chief operating decision maker does not regularly review any asset information by operating segment and, accordingly, we do not report asset information by operating segment. Total assets were approximately $165 billion as of April 1, 2018 and $172 billion as of December 31, 2017.
Selected Income Statement Information
The following table provides selected income statement information by reportable segment:
 
 
Three Months Ended
 
 
Revenues
 
Earnings(a)
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

 
April 1,
2018

 
April 2,
2017

Reportable Segments:
 
 
 
 
 
 
 
 
IH(b)
 
$
7,829

 
$
7,415

 
$
4,930

 
$
4,747

EH(b)
 
5,077

 
5,364

 
2,788

 
3,039

Total reportable segments
 
12,906

 
12,779

 
7,719

 
7,787

Other business activities(c), (d)
 
—

 
—

 
(725
)
 
(688
)
Reconciling Items:
 
 
 
 
 
 

 
 

Corporate(b), (d)
 
—

 
—

 
(1,153
)
 
(1,335
)
Purchase accounting adjustments(d)
 
—

 
—

 
(1,221
)
 
(1,172
)
Acquisition-related costs(d)
 
—

 
—

 
(48
)
 
(124
)
Certain significant items(e)
 
—

 
—

 
(201
)
 
(157
)
Other unallocated(b)
 
—

 
—

 
(244
)
 
(359
)
 
 
$
12,906

 
$
12,779


$
4,127

 
$
3,951

(a) 
Income from continuing operations before provision for taxes on income. IH’s earnings in the first quarter of 2018 and 2017 include dividend income of $59 million and $43 million, respectively, from our investment in ViiV. For additional information, see Note 4.
(b) 
In connection with the StratCO reporting change, in the first quarter of 2017 we reclassified approximately $98 million of costs from IH, approximately $33 million of costs from EH and approximately $9 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.
(c) 
Other business activities includes the costs managed by our WRD and GPD organizations.
(d) 
For a description, see the “Other Costs and Business Activities” section above.
(e) 
Certain significant items are substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.
For Earnings in the first quarter of 2018, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $51 million, (ii) income for certain legal matters of $19 million, (iii) an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $3 million, (iv) charges for business and legal entity alignment of $3 million and (v) other charges of $163 million, which primarily includes $108 million, in the aggregate, for a special one-time bonus paid to virtually all Pfizer colleagues, excluding executives, which was one of several actions taken by us after evaluating the expected positive net impact of the December 2017 enactment of the TCJA on us. For additional information, see Note 2B, Note 3, Note 4 and Note 5.
For Earnings in the first quarter of 2017, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $30 million, (ii) charges for certain legal matters of $8 million, (iii) an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $37 million, (iv) charges for business and legal entity alignment of $21 million and (v) other charges of $61 million. For additional information, see Note 2B, Note 3 and Note 4.
Equity in the net income of investees accounted for by the equity method is not significant for any of our operating segments.
The operating segment information does not purport to represent the revenues, costs and income from continuing operations before provision for taxes on income that each of our operating segments would have recorded had each segment operated as a standalone company during the periods presented.
B. Geographic Information
As described in Note 1A, the sale of HIS impacted our results of operations in 2017.
The following table provides revenues by geographic area:
 

Three Months Ended
(MILLIONS OF DOLLARS)

April 1,
2018


April 2,
2017


%
Change

U.S.

$
6,275


$
6,637


(5
)
Developed Europe(a)

2,092


2,021


4

Developed Rest of World(b)

1,461


1,554


(6
)
Emerging Markets(c)

3,078


2,567


20

Revenues

$
12,906


$
12,779


1

(a) 
Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland. Revenues denominated in euros were $1.7 billion and $1.6 billion in the first quarter of 2018 and 2017, respectively.
(b) 
Developed Rest of World region includes the following markets: Japan, Canada, Australia, South Korea and New Zealand.
(c) 
Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Eastern Europe, Africa, the Middle East, Central Europe and Turkey.
C. Other Revenue Information
Significant Product Revenues
As described in Note 1A, the sale of HIS impacted our results of operations in 2017.
The following table provides detailed revenue information:
(MILLIONS OF DOLLARS)
 
 
 
Three Months Ended
PRODUCT
 
PRIMARY INDICATIONS OR CLASS
 
April 1,
2018

 
April 2,
2017

TOTAL REVENUES
 
 
 
$
12,906

 
$
12,779

PFIZER INNOVATIVE HEALTH (IH)(a)
 
$
7,829

 
$
7,415

Internal Medicine
 
 
 
$
2,347

 
$
2,377

Lyrica IH(b)
 
Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury
 
1,131

 
1,131

Eliquis alliance revenues and direct sales
 
Atrial fibrillation, deep vein thrombosis, pulmonary embolism
 
765

 
564

Chantix/Champix
 
An aid to smoking cessation treatment in adults 18 years of age or older
 
251

 
239

BMP2
 
Development of bone and cartilage
 
73

 
62

Toviaz
 
Overactive bladder
 
60

 
63

Viagra IH(c)
 
Erectile dysfunction
 
—

 
249

All other Internal Medicine
 
Various
 
66

 
69

Vaccines
 
 
 
$
1,463

 
$
1,465

Prevnar 13/Prevenar 13
 
Vaccines for prevention of pneumococcal disease
 
1,380

 
1,392

All other Vaccines
 
Various
 
83

 
73

Oncology
 
 
 
$
1,697

 
$
1,347

Ibrance
 
Advanced breast cancer
 
933

 
679

Sutent
 
Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor
 
262

 
250

Xtandi alliance revenues
 
Advanced prostate cancer
 
159

 
131

Xalkori
 
ALK-positive and ROS1-positive advanced NSCLC
 
153

 
142

Inlyta
 
Advanced RCC
 
74

 
85

Bosulif
 
Philadelphia chromosome–positive chronic myelogenous leukemia
 
60

 
47

All other Oncology
 
Various
 
57

 
14

Inflammation & Immunology (I&I)
 
 
 
$
869

 
$
871

Enbrel (Outside the U.S. and Canada)
 
Rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis
 
506

 
588

Xeljanz
 
Rheumatoid arthritis; psoriatic arthritis
 
326

 
250

Eucrisa

Mild-to-moderate atopic dermatitis (eczema)
 
26

 
9

All other I&I
 
Various
 
11

 
24

Rare Disease
 
 
 
$
549

 
$
507

BeneFIX
 
Hemophilia
 
147

 
149

Genotropin
 
Replacement of human growth hormone
 
132

 
104

Refacto AF/Xyntha
 
Hemophilia
 
130

 
130

Somavert
 
Acromegaly
 
63

 
56

All other Rare Disease
 
Various
 
76

 
67

Consumer Healthcare
 
 
 
$
905

 
$
848

PFIZER ESSENTIAL HEALTH (EH)(d)
 
 
 
$
5,077

 
$
5,364

Legacy Established Products (LEP)(e)
 
 
 
$
2,636

 
$
2,606

Lipitor
 
Reduction of LDL cholesterol
 
511

 
404

Norvasc
 
Hypertension
 
254

 
228

Premarin family
 
Symptoms of menopause
 
191

 
228

Zithromax
 
Bacterial infections
 
90

 
79

Zoloft
 
Depression and certain anxiety disorders
 
74

 
68

Xalatan/Xalacom
 
Glaucoma and ocular hypertension
 
72

 
77

Effexor
 
Depression and certain anxiety disorders
 
71

 
66

Sildenafil Citrate
 
Erectile dysfunction
 
62

 
—

Xanax
 
Anxiety disorders
 
54

 
55

EpiPen
 
Epinephrine injection used in treatment of life-threatening allergic reactions
 
52

 
81

All other LEP
 
Various
 
1,203

 
1,321

(MILLIONS OF DOLLARS)
 
 
 
Three Months Ended
PRODUCT
 
PRIMARY INDICATIONS OR CLASS
 
April 1,
2018

 
April 2,
2017

Sterile Injectable Pharmaceuticals (SIP)(f)
 
$
1,360

 
$
1,552

Sulperazon
 
Treatment of infections
 
168

 
122

Medrol
 
Steroid anti-inflammatory
 
120

 
120

Fragmin
 
Slows blood clotting
 
70

 
71

Tygacil
 
Tetracycline class antibiotic
 
63

 
74

Zosyn/Tazocin
 
Antibiotic
 
61

 
37

Precedex
 
Sedation agent in surgery or intensive care
 
55

 
64

All other SIP
 
Various
 
823

 
1,063

Peri-LOE Products(g)
 
 
 
$
737

 
$
822

Viagra EH(c)
 
Erectile dysfunction
 
187

 
89

Celebrex
 
Arthritis pain and inflammation, acute pain
 
145

 
175

Vfend
 
Fungal infections
 
98

 
107

Lyrica EH(b)
 
Epilepsy, neuropathic pain and generalized anxiety disorder
 
82

 
141

Zyvox
 
Bacterial infections
 
68

 
77

Revatio
 
Pulmonary arterial hypertension
 
56

 
65

Pristiq
 
Depression
 
53

 
116

All other Peri-LOE Products
 
Various
 
49

 
53

Biosimilars(h)
 
Various
 
$
173

 
$
105

Inflectra/Remsima
 
Inflammatory diseases
 
145

 
78

All other Biosimilars
 
Various
 
29

 
27

Pfizer CentreOne(i)
 
 
 
$
171

 
$
182

Hospira Infusion Systems (HIS)(j)
 
Various
 
$
—

 
$
97

Total Lyrica(b)
 
Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury
 
$
1,213

 
$
1,271

Total Viagra(c)
 
Erectile dysfunction
 
$
187

 
$
339

Total Alliance revenues
 
Various
 
$
855

 
$
656


(a) 
The IH business encompasses Internal Medicine, Vaccines, Oncology, Inflammation & Immunology, Rare Disease and Consumer Healthcare.
(b) 
Lyrica revenues from all of Europe, Russia, Turkey, Israel and Central Asia countries are included in Lyrica EH. All other Lyrica revenues are included in Lyrica IH. Total Lyrica revenues represent the aggregate of worldwide revenues from Lyrica IH and Lyrica EH.
(c) 
Viagra lost exclusivity in the U.S. in December 2017. Beginning in 2018, revenues for Viagra in the U.S. and Canada, which were reported in IH through 2017, are reported in EH (which reported all other Viagra revenues excluding the U.S. and Canada through 2017). Therefore, total Viagra revenues in 2018 are reported in EH. Total Viagra revenues in 2017 represent the aggregate of worldwide revenues from Viagra IH and Viagra EH.
(d) 
The EH business encompasses Legacy Established Products, Sterile Injectable Pharmaceuticals, Peri-LOE Products, Biosimilars, Pfizer CentreOne and HIS (through February 2, 2017).
(e) 
Legacy Established Products primarily include products that have lost patent protection (excluding Sterile Injectable Pharmaceuticals and Peri-LOE Products). In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
(f)  
Sterile Injectable Pharmaceuticals includes branded and generic injectables (excluding Peri-LOE Products). In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previous reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
(g) 
Peri-LOE Products includes products that have recently lost or are anticipated to soon lose patent protection. These products primarily include: Lyrica in Europe, Russia, Turkey, Israel and Central Asia; worldwide revenues for Celebrex, Pristiq, Zyvox, Vfend, Revatio and Inspra; and beginning in 2018, Viagra revenues for all countries (and Viagra revenues for all countries other than the U.S. and Canada in 2017, see note (c) above).
(h) 
Biosimilars includes Inflectra/Remsima (biosimilar infliximab) in the U.S. and certain international markets, Nivestim (biosimilar filgrastim) in certain European, Asian and Africa/Middle Eastern markets and Retacrit (biosimilar epoetin zeta) in certain European and Africa/Middle Eastern markets.
(i) 
Pfizer CentreOne includes revenues from our contract manufacturing and active pharmaceutical ingredient sales operation, including sterile injectables contract manufacturing, and revenues related to our manufacturing and supply agreements, including with Zoetis Inc. In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in first-quarter 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
(j) 
HIS (through February 2, 2017) includes Medication Management Systems products composed of infusion pumps and related software and services, as well as IV Infusion Products, including large volume IV solutions and their associated administration sets.
v3.8.0.1
Basis of Presentation and Significant Accounting Policies (Policies)
 3 Months Ended
Apr. 01, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation
Basis of Presentation

See the Glossary of Defined Terms at the beginning of this Quarterly Report on Form 10-Q for terms used throughout the condensed consolidated financial statements and related notes of this Quarterly Report on Form 10-Q.

We prepared the condensed consolidated financial statements following the requirements of the SEC for interim reporting. As permitted under those rules, certain footnotes or other financial information that are normally required by U.S. GAAP can be condensed or omitted.

The financial information included in our condensed consolidated financial statements for subsidiaries operating outside the U.S. is as of and for the three months ended February 25, 2018 and February 26, 2017. The financial information included in our condensed consolidated financial statements for U.S. subsidiaries is as of and for the three months ended April 1, 2018 and April 2, 2017.

Revenues, expenses, assets and liabilities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year.

We are responsible for the unaudited financial statements included in this Quarterly Report on Form 10-Q. The interim financial statements include all normal and recurring adjustments that are considered necessary for the fair statement of our condensed consolidated balance sheets and condensed consolidated statements of income. The information included in this Quarterly Report on Form 10-Q should be read in conjunction with the consolidated financial statements and accompanying notes included in our 2017 Form 10-K.
Adoption of New Accounting Standards
Adoption of New Accounting Standards
On January 1, 2018, we adopted eleven new accounting standards. The quantitative impacts on our prior period condensed consolidated financial statements of adopting the following new standards are summarized in the tables within the section titled Impacts to our Condensed Consolidated Financial Statements, further below.
Revenues––We adopted a new accounting standard for revenue recognition and changed our revenue recognition policies accordingly. Generally, the previous revenue recognition standards permitted recognition when persuasive evidence of a contract existed, delivery had occurred, and the seller's price to the buyer was fixed or determinable. Under the new standard, revenue is recognized upon transfer of control of the product to our customer in an amount that reflects the consideration we expect to receive in exchange. We adopted the new accounting standard utilizing the modified retrospective method, and, therefore, no adjustments were made to amounts in our prior period financial statements. We recorded the cumulative effect of adopting the standard as an adjustment to increase the opening balance of Retained earnings by $584 million on a pre-tax basis ($450 million after-tax). This amount includes $500 million (pre-tax) related to the timing of recognizing Other (income)/deductions––net primarily for upfront and milestone payments on our collaboration arrangements ($394 million, pre-tax) and, to a lesser extent, product rights and out-licensing arrangements, and $84 million (pre-tax) related to the timing of recognizing Revenues and Cost of sales on product shipments. The impact of adoption did not have a material impact to our condensed consolidated statement of income for the three months ended April 1, 2018 or our condensed consolidated balance sheet as of April 1, 2018. For additional information, see Note 1C.
Financial Assets and Liabilities––The new accounting standard related to the recognition and measurement of financial assets and liabilities makes the following changes to prior guidance and requires:
•
certain equity investments to be measured at fair value with changes in fair value now recognized in net income. However, equity investments that do not have readily determinable fair values may be measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer;
•
a qualitative assessment of equity investments without readily determinable fair values to identify impairment; and
•
separate presentation of financial assets and financial liabilities by measurement category and form of financial asset on the balance sheet or in the accompanying notes to the financial statements.
We adopted the new accounting standard utilizing the modified retrospective method, and, therefore, no adjustments were made to amounts in our prior period financial statements. We recorded the cumulative effect of adopting the standard as an adjustment to increase the opening balance of Retained earnings by $462 million on a pre-tax basis ($419 million after-tax) related to the net impact of unrealized gains and losses primarily on available-for-sale equity securities, restricted stock and private equity securities. In the first quarter of 2018, we recorded net unrealized gains on equity securities of $111 million. For additional information, see Note 4 and Note 7.

Presentation of Net Periodic Pension and Postretirement Benefit Cost––We adopted a new accounting standard that requires the net periodic pension and postretirement benefit costs other than the service costs be presented in Other (income)/deductions––net, and that the presentation be applied retrospectively. We adopted the presentation of the net periodic benefit costs other than service costs by reclassifying these costs from Cost of sales, Selling, informational and administrative expenses, Research and development expenses and Restructuring charges and certain acquisition-related costs to Other (income)/deductions––net. We elected to apply the practical expedient as it is impracticable to determine the disaggregation of the cost components for amounts capitalized within Inventories and property, plant and equipment and amortized in each of those periods. We have therefore reclassified the prior period net periodic benefit costs/(credits) disclosed in Note 10 to apply the retrospective presentation for comparative periods.
As of January 1, 2018, only service costs will be included in amounts capitalized in Inventories or property, plant and equipment, while the other components of net periodic benefit costs will be included in Other (income)/deductions––net. For additional information, see Note 4 and Note 10.
Income Tax Accounting––The new guidance removes the prohibition against recognizing current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to a third party, unless the asset transferred is inventory. We adopted the standard utilizing the modified retrospective method, and, therefore, no adjustments were made to amounts in our prior period financial statements. We recorded the cumulative effect of adopting the standard as an adjustment to decrease the opening balance of Retained earnings by $189 million.
Accounting for Hedging Activities––The standard makes the following changes:
•
Permits hedge accounting for risk components in hedging relationships involving nonfinancial risk and interest rate risk;
•
Changes the guidance for designating fair value hedges of interest rate risk and for measuring the change in fair value of the hedged item in fair value hedges of interest rate risk;
•
No longer requires the separate measurement and reporting of hedge ineffectiveness, but requires the income statement presentation of the earnings effect of the hedging instrument with the earnings effect of the hedged item;
•
Permits us to exclude the portion of the change in fair value of a currency swap that is attributable to a cross-currency basis spread from the assessment of hedge effectiveness; and
•
Simplifies hedge effectiveness testing.
We early adopted the new accounting standard on January 1, 2018 on a prospective basis. In the first quarter of 2018, we recorded income of $29 million in Other (income)/deductions––net, whereas this item would have been classified in interest income in prior periods. For additional information, see Note 7F.
Reclassification of Certain Tax Effects from AOCI––We early adopted a new accounting standard that provides guidance on the reclassification of certain tax effects from AOCI. Under the new guidance, we elected to reclassify the stranded tax amounts related to the TCJA from AOCI to Retained earnings. We adopted the new accounting standard utilizing the modified retrospective method, and recorded the cumulative effect of adopting the standard as an adjustment to increase the opening balance of Retained earnings by $495 million, primarily due to the effect of the change in the U.S. Federal corporate tax rate. The impact on other stranded tax amounts related to the application of the TCJA was not material to our condensed consolidated financial statements.
Classification of Certain Transactions in the Statement of Cash Flows––We retrospectively adopted an accounting standard that changed the presentation of certain information in the condensed consolidated statements of cash flows, including the classification of:
•
debt prepayment and extinguishment costs, resulting in an increase in Operating activities––Other adjustments, net and a decrease in Financing activities––Other financing activities, net of $5 million for the three months ended April 1, 2018; and
•
accreted interest on the settlement of commercial paper debt instruments, resulting in a decrease in Operating activities––Other adjustments, net, and an increase in Financing activities––Other financing activities, net of $24 million for the three months ended April 1, 2018.
The new standard also establishes guidance on the classification of certain cash flows related to contingent consideration in a business acquisition. Cash payments made soon after a business acquisition date will be classified as Investing activities, while payments made thereafter will be classified as Financing activities. Payments made in excess of the amount of the original contingent consideration liability will be classified as Operating activities. The adoption of this guidance will not have a material impact to our condensed consolidated financial statements.
Presentation of Restricted Cash in the Statement of Cash Flows––We adopted, on a retrospective basis, the new accounting standard, which requires that Restricted cash and restricted cash equivalents be included with Cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown in the consolidated statements of cash flows. As a result, for the three months ended April 1, 2018, $25 million is presented as an increase in Cash, cash equivalents, restricted cash and restricted cash equivalents.
Definition of a Business––We prospectively adopted the standard for determining whether business development transactions should be accounted for as acquisitions (or disposals) of assets or businesses. If substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset, the transaction will not qualify for treatment as a business. To be considered a business, a set of integrated activities and assets must include, at a minimum, an input and a substantive process that together significantly contribute to the ability to create outputs, without regard as to whether a purchaser could replace missing elements. In addition, the definition of the term “output” has been narrowed to make it consistent with the updated revenue recognition guidance. In the first quarter of 2018, there was no impact to our condensed consolidated financial statements from the adoption of this new standard.
Derecognition of Nonfinancial Assets––We prospectively adopted the standard, which applies to the full or partial sale or transfer of nonfinancial assets, including intangible assets, real estate and inventory. The standard provides that the gain or loss is determined by the difference between the consideration received and the carrying value of the asset. In the first quarter of 2018, there was no impact to our condensed consolidated financial statements from the adoption of this new standard.
Accounting for Modifications of Share-Based Payment Awards––We prospectively adopted the standard, which clarifies that certain changes in the terms or conditions of a share-based payment award be accounted for as a modification. There was no impact to our condensed consolidated financial statements from the adoption of this new standard.
Impacts to our Condensed Consolidated Financial Statements––The impacts on our prior period condensed consolidated financial statements of adopting the new standards described above are summarized in the following tables:
Adoption of the standard related to pension and postretirement benefit costs impacted our prior period condensed consolidated statement of income as follows:
 
 
Three months ended April 2, 2017
(MILLIONS OF DOLLARS)
 
As Previously Reported

 
Effect of Change
Higher/(Lower)

 
As Restated

Cost of sales
 
$
2,470

 
$
(3
)
 
$
2,468

Selling, informational and administrative expenses
 
3,308

 
7

 
3,315

Research and development expenses
 
1,708

 
8

 
1,716

Restructuring charges and certain acquisition-related costs
 
157

 
(74
)
 
84

Other (income)/deductions––net
 
(1
)
 
62

 
60

Income from continuing operations before provision for taxes on income
 
3,951

 
—

 
3,951

Adoption of the standards impacted our condensed consolidated balance sheet as follows:
 
 
 
 
Effect of New Accounting Standards Higher/(Lower)

 
 
(MILLIONS OF DOLLARS)
 
As Previously Reported Balance at December 31, 2017

 
Revenues

 
Financial Assets and Liabilities

 
Income
Tax Accounting

 
Reclassification of Certain Tax Effects from AOCI

 
Balance at January 1, 2018

Trade accounts receivable
 
$
8,221

 
$
13

 
$
—

 
$
—

 
$
—

 
$
8,234

Inventories
 
7,578

 
(11
)
 
—

 
—

 
—

 
7,567

Current tax assets
 
3,050

 
(11
)
 
—

 
(3
)
 
—

 
3,036

Noncurrent deferred tax assets and other noncurrent tax assets
 
1,855

 
(17
)
 
—

 
—

 
—

 
1,838

Other noncurrent assets
 
3,227

 
—

 
—

 
(204
)
 
—

 
3,023

Other current liabilities
 
11,115

 
(123
)
 
—

 
—

 
—

 
10,992

Noncurrent deferred tax liabilities
 
3,900

 
106

 
—

 
(18
)
 
—

 
3,988

Other noncurrent liabilities
 
6,149

 
(459
)
 
—

 
—

 
—

 
5,690

Retained earnings
 
85,291

 
450

 
419

 
(189
)
 
495

 
86,466

Accumulated other comprehensive loss
 
(9,321
)
 
—

 
(419
)
 
—

 
(495
)
 
(10,235
)
Adoption of the standards related to the classification of certain transactions in the statement of cash flows and the presentation of restricted cash in the statement of cash flows impacted our condensed consolidated statement of cash flows as follows:
 
 
Three months ended April 2, 2017
 
 
 
 
Effect of New Accounting Standards Inflow/(Outflow)
 
 
(MILLIONS OF DOLLARS)
 
As Previously Reported

 
Cash Flow Classification

 
Restricted Cash

 
As Restated

Operating Activities
 
 
 
 
 
 
 
 
Other adjustments, net
 
$
(211
)
 
(14
)
 
$
—

 
$
(225
)
Other changes in assets and liabilities, net of acquisitions and divestitures
 
(2,225
)
 
—

 
8

 
(2,217
)
Investing Activities
 
 
 
 
 
 
 
 
Proceeds from redemptions and sales of short-term investments
 
2,235

 
—

 
(3
)
 
2,232

Proceeds from redemptions/sales of long-term investments
 
846

 
—

 
(2
)
 
844

Financing Activities
 
 
 
 
 
 
 
 
Principal payments on short-term borrowings
 
(2,530
)
 
11

 
—

 
(2,519
)
Net proceeds from/(payments on) short-term borrowings with original maturities of three months or less
 
(2,113
)
 
3

 
—

 
(2,110
)
Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents
 
1,461

 
—

 
4

 
1,465

Cash and cash equivalents and restricted cash and cash equivalents, beginning
 
2,595

 
—

 
70

 
2,666

Cash and cash equivalents and restricted cash and cash equivalents, ending
 
4,057

 
—

 
74

 
4,131



C. Revenues

On January 1, 2018, we adopted a new accounting standard for revenue recognition. For further information, see Note 1B.
We recorded direct product and/or alliance revenues of more than $1 billion for each of nine products in 2017. These direct products sales and/or alliance product revenues represented 46% of our revenues in 2017. The loss or expiration of intellectual property rights can have a significant adverse effect on our revenues as our contracts with customers will generally be at lower selling prices due to added competition and we generally provide for higher sales returns during the period in which individual markets begin to near the loss or expiration of intellectual property rights. Our Consumer Healthcare business includes OTC brands with a focus on dietary supplements, pain management, gastrointestinal and respiratory and personal care. According to Euromonitor International’s retail sales data, in 2017, our Consumer Healthcare business was the fifth-largest branded multi-national, OTC consumer healthcare business in the world and produced two of the ten largest selling consumer healthcare brands (Centrum and Advil) in the world. We sell biopharmaceutical products after patent expiration, and under patent, and, to a much lesser extent, consumer healthcare products worldwide to developed and emerging market countries.
Revenue Recognition––We record revenues from product sales when there is a transfer of control of the product from us to the customer. We determine transfer of control based on when the product is shipped or delivered and title passes to the customer.
•
Customers––Our biopharmaceutical products are sold principally to wholesalers but we also sell directly to retailers, hospitals, clinics, government agencies and pharmacies, and, in the case of our vaccine products in the U.S., we primarily sell directly to the CDC, wholesalers and individual provider offices. Our consumer healthcare customers include retailers and, to a lesser extent, wholesalers and distributors.
Biopharmaceutical products that ultimately are used by patients are generally covered under governmental programs, managed care programs, insurance programs, including those managed through pharmacy benefit managers, and are subject to sales allowances and/or rebates payable directly to those programs. Those sales allowances and rebates are generally negotiated, but government programs may have legislated amounts by type of product (e.g., patented or unpatented).
•
Our Sales Contracts––Sales on credit are typically under short-term contracts. Collections are based on market payment cycles common in various markets, with shorter cycles in the U.S. Sales are adjusted for sales allowances, chargebacks, rebates and sales returns and cash discounts. Sales returns occur due to loss of exclusivity, product recalls or a changing competitive environment.
•
Deductions from Revenues––Our gross product revenues are subject to a variety of deductions, which generally are estimated and recorded in the same period that the revenues are recognized. Such variable consideration represents chargebacks, rebates, sales allowances and sales returns. These deductions represent estimates of the related obligations and, as such, knowledge and judgment is required when estimating the impact of these revenue deductions on gross sales for a reporting period.
Specifically:
•
In the U.S., we sell our products to distributors and hospitals under our sales contracts. However, we also have contracts with managed care or pharmacy benefit managers and legislatively mandated contracts with the federal and state governments under which we provide rebates to them based on medicines utilized by the lives they cover. We record provisions for Medicare, Medicaid, and performance-based contract pharmaceutical rebates based upon our experience ratio of rebates paid and actual prescriptions written during prior quarters. We apply the experience ratio to the respective period’s sales to determine the rebate accrual and related expense. This experience ratio is evaluated regularly to ensure that the historical trends are as current as practicable. We estimate discounts on branded prescription drug sales to Medicare Part D participants in the Medicare “coverage gap,” also known as the “doughnut hole,” based on the historical experience of beneficiary prescriptions and consideration of the utilization that is expected to result from the discount in the coverage gap. We evaluate this estimate regularly to ensure that the historical trends and future expectations are as current as practicable. For performance-based contract rebates, we also consider current contract terms, such as changes in formulary status and rebate rates.
•
Outside the U.S., the majority of our pharmaceutical sales allowances are contractual or legislatively mandated and our estimates are based on actual invoiced sales within each period, which reduces the risk of variations in the estimation process. In certain European countries, rebates are calculated on the government’s total unbudgeted pharmaceutical spending or on specific product sales thresholds and we apply an estimated allocation factor against our actual invoiced sales to project the expected level of reimbursement. We obtain third-party information that helps us to monitor the adequacy of these accruals.
•
Provisions for pharmaceutical chargebacks (primarily reimbursements to U.S. wholesalers for honoring contracted prices to third parties) closely approximate actual as we settle these deductions generally within two to five weeks of incurring the liability.
•
Provisions for pharmaceutical sales returns are based on a calculation for each market that incorporates the following, as appropriate: local returns policies and practices; historical returns as a percentage of sales; an understanding of the reasons for past returns; estimated shelf life by product; an estimate of the amount of time between shipment and return or lag time; and any other factors that could impact the estimate of future returns, such as loss of exclusivity, product recalls or a changing competitive environment. Generally, returned products are destroyed, and customers are refunded the sales price in the form of a credit.
•
We record sales incentives as a reduction of revenues at the time the related revenues are recorded or when the incentive is offered, whichever is later. We estimate the cost of our sales incentives based on our historical experience with similar incentives programs to predict customer behavior.
Our accruals for Medicare rebates, Medicaid and related state program rebates, performance-based contract rebates, chargebacks, sales allowances and sales returns and cash discounts totaled $5.4 billion and $4.9 billion as of April 1, 2018 and December 31, 2017, respectively.
The following table provides information about the balance sheet classification of these accruals:
(MILLIONS OF DOLLARS)
 
April 1, 2018

 
December 31, 2017

Reserve against Trade accounts receivable, less allowance for doubtful accounts
 
$
1,363

 
$
1,352

 
 
 
 
 
Other current liabilities:
 
 
 
 
Accrued rebates
 
2,932

 
2,674

Other accruals
 
725

 
512

 
 
 
 
 
Other noncurrent liabilities
 
372

 
385

Total accrued rebates and other accruals
 
$
5,392

 
$
4,923


Amounts recorded for revenue deductions can result from a complex series of judgments about future events and uncertainties and can rely heavily on estimates and assumptions. On a quarterly basis, our adjustments of estimates to reflect actual results generally have been less than 1% of revenues, and have resulted in either a net increase or a net decrease in Revenues. Product-specific rebates, however, can have a significant impact on year-over-year individual product growth trends.

Taxes collected from customers relating to product sales and remitted to governmental authorities are excluded from Revenues.
D. Collaborative Arrangements
Payments to and from our collaboration partners are presented in our condensed consolidated statements of income based on the nature of the arrangement (including its contractual terms), the nature of the payments and applicable accounting guidance. Under co-promotion agreements, we record the amounts received from our collaboration partners as alliance revenues, a component of Revenues, when our collaboration partners are the principal in the transaction and we receive a share of their net sales or profits. Alliance revenues are recorded as we perform co-promotion services for the collaboration and the collaboration partners sell the products to their customers within the applicable period. The related expenses for selling and marketing these products are included in Selling, informational and administrative expenses. In collaborative arrangements where we manufacture a product for our collaboration partners, we record revenues when we transfer control of the product to our collaboration partners. All royalty payments to collaboration partners are included in Cost of sales. Royalty payments received from collaboration partners are included in Other (income)/deductions—net.
Reimbursements to or from our collaboration partners for development costs are recorded net in Research and development expenses. Upfront payments and pre-approval milestone payments due from us to our collaboration partners in development stage collaborations are recorded as Research and development expenses. Milestone payments due from us to our collaboration partners after regulatory approval has been attained for a medicine are recorded in Identifiable intangible assets—Developed technology rights. Upfront and pre-approval milestone payments earned from our collaboration partners by us are recognized in Other (income)/deductions—net over the development period for the collaboration products, when our performance obligations include providing R&D services to our collaboration partners. Upfront, pre-approval and post-approval milestone payments earned by us may be recognized in Other (income)/deductions—net immediately when earned or over other periods depending upon the nature of our performance obligations in the applicable collaboration. Where the milestone event is regulatory approval for a medicine, we generally recognize milestone payments due to us in the transaction price when regulatory approval in the applicable jurisdiction has been attained. We may recognize milestone payments due to us in the transaction price earlier than the milestone event in certain circumstances when recognition of the income would not be probable of a significant reversal.
On January 1, 2018, we adopted a new accounting standard on revenue recognition (see Note 1B). As a result of the adoption, we recognized the following cumulative effect adjustments related to collaboration arrangements to Retained earnings:
•
$394 million (pre-tax) for collaborative arrangements where the period over which upfront, pre-approval and regulatory approval milestone payments received from our collaboration partners are recognized in Other (income)/deductions—net over a reduced period. Under the new standard, the income from upfront and pre-approval milestone payments due to us is typically recognized over the development period for the collaboration when our performance obligation, in addition to granting a license, is to provide research and development services to our collaboration partners, and major regulatory approval milestones are typically recognized immediately when earned as the related development period has ended. The income from upfront and milestone payments is typically recognized immediately as earned if our performance obligation, in addition to granting a license, is only for commercialization activities. Under the old standard, this income was recognized over the combined development and estimated commercialization (including co-promotion) period for the collaboration products.
•
$82 million (pre-tax) for collaborative arrangements where we manufacture products for our collaboration partners and recognize Revenues and Cost of sales for product shipments at an earlier point in time. Under the new standard, revenue is recognized when we transfer control of the products to our collaboration partners. Under the old standard, revenue was recognized when our collaboration partners sell the products and transfer title to their third party customers.
v3.8.0.1
Basis of Presentation and Significant Accounting Policies (Tables)
 3 Months Ended
Apr. 01, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Impact of Adoption of Accounting Standard Updates
Adoption of the standard related to pension and postretirement benefit costs impacted our prior period condensed consolidated statement of income as follows:
 
 
Three months ended April 2, 2017
(MILLIONS OF DOLLARS)
 
As Previously Reported

 
Effect of Change
Higher/(Lower)

 
As Restated

Cost of sales
 
$
2,470

 
$
(3
)
 
$
2,468

Selling, informational and administrative expenses
 
3,308

 
7

 
3,315

Research and development expenses
 
1,708

 
8

 
1,716

Restructuring charges and certain acquisition-related costs
 
157

 
(74
)
 
84

Other (income)/deductions––net
 
(1
)
 
62

 
60

Income from continuing operations before provision for taxes on income
 
3,951

 
—

 
3,951

Adoption of the standards impacted our condensed consolidated balance sheet as follows:
 
 
 
 
Effect of New Accounting Standards Higher/(Lower)

 
 
(MILLIONS OF DOLLARS)
 
As Previously Reported Balance at December 31, 2017

 
Revenues

 
Financial Assets and Liabilities

 
Income
Tax Accounting

 
Reclassification of Certain Tax Effects from AOCI

 
Balance at January 1, 2018

Trade accounts receivable
 
$
8,221

 
$
13

 
$
—

 
$
—

 
$
—

 
$
8,234

Inventories
 
7,578

 
(11
)
 
—

 
—

 
—

 
7,567

Current tax assets
 
3,050

 
(11
)
 
—

 
(3
)
 
—

 
3,036

Noncurrent deferred tax assets and other noncurrent tax assets
 
1,855

 
(17
)
 
—

 
—

 
—

 
1,838

Other noncurrent assets
 
3,227

 
—

 
—

 
(204
)
 
—

 
3,023

Other current liabilities
 
11,115

 
(123
)
 
—

 
—

 
—

 
10,992

Noncurrent deferred tax liabilities
 
3,900

 
106

 
—

 
(18
)
 
—

 
3,988

Other noncurrent liabilities
 
6,149

 
(459
)
 
—

 
—

 
—

 
5,690

Retained earnings
 
85,291

 
450

 
419

 
(189
)
 
495

 
86,466

Accumulated other comprehensive loss
 
(9,321
)
 
—

 
(419
)
 
—

 
(495
)
 
(10,235
)
Adoption of the standards related to the classification of certain transactions in the statement of cash flows and the presentation of restricted cash in the statement of cash flows impacted our condensed consolidated statement of cash flows as follows:
 
 
Three months ended April 2, 2017
 
 
 
 
Effect of New Accounting Standards Inflow/(Outflow)
 
 
(MILLIONS OF DOLLARS)
 
As Previously Reported

 
Cash Flow Classification

 
Restricted Cash

 
As Restated

Operating Activities
 
 
 
 
 
 
 
 
Other adjustments, net
 
$
(211
)
 
(14
)
 
$
—

 
$
(225
)
Other changes in assets and liabilities, net of acquisitions and divestitures
 
(2,225
)
 
—

 
8

 
(2,217
)
Investing Activities
 
 
 
 
 
 
 
 
Proceeds from redemptions and sales of short-term investments
 
2,235

 
—

 
(3
)
 
2,232

Proceeds from redemptions/sales of long-term investments
 
846

 
—

 
(2
)
 
844

Financing Activities
 
 
 
 
 
 
 
 
Principal payments on short-term borrowings
 
(2,530
)
 
11

 
—

 
(2,519
)
Net proceeds from/(payments on) short-term borrowings with original maturities of three months or less
 
(2,113
)
 
3

 
—

 
(2,110
)
Net increase/(decrease) in cash and cash equivalents and restricted cash and cash equivalents
 
1,461

 
—

 
4

 
1,465

Cash and cash equivalents and restricted cash and cash equivalents, beginning
 
2,595

 
—

 
70

 
2,666

Cash and cash equivalents and restricted cash and cash equivalents, ending
 
4,057

 
—

 
74

 
4,131
Schedule of Balance Sheet Classification of Accruals
The following table provides information about the balance sheet classification of these accruals:
(MILLIONS OF DOLLARS)
 
April 1, 2018

 
December 31, 2017

Reserve against Trade accounts receivable, less allowance for doubtful accounts
 
$
1,363

 
$
1,352

 
 
 
 
 
Other current liabilities:
 
 
 
 
Accrued rebates
 
2,932

 
2,674

Other accruals
 
725

 
512

 
 
 
 
 
Other noncurrent liabilities
 
372

 
385

Total accrued rebates and other accruals
 
$
5,392

 
$
4,923
v3.8.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Tables)
 3 Months Ended
Apr. 01, 2018
Restructuring and Related Activities [Abstract]  
Schedule of Components of Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives
The following table provides the components of costs associated with acquisitions and cost-reduction/productivity initiatives:
 
 
Three Months Ended
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

Restructuring (credits)/charges:
 
 

 
 

Employee terminations
 
$
(8
)
 
$
(30
)
Asset impairments
 
2

 
24

Exit costs
 
(3
)
 
2

Restructuring credits(a)
 
(9
)
 
(5
)
Transaction costs(b)
 
—

 
12

Integration costs(c)
 
52

 
77

Restructuring charges and certain acquisition-related costs
 
43

 
84

Net periodic benefit costs recorded in Other (income)/deductions––net(d)
 
32

 
74

Additional depreciation––asset restructuring recorded in Cost of sales(e)

 
17

 
14

Implementation costs recorded in our condensed consolidated statements of income as follows(f):
 
 

 
 

Cost of sales
 
16

 
15

Selling, informational and administrative expenses
 
17

 
9

Research and development expenses
 
6

 
7

Total implementation costs
 
39

 
31

Total costs associated with acquisitions and cost-reduction/productivity initiatives
 
$
131

 
$
202


(a) 
In the three months ended April 1, 2018, restructuring credits are primarily associated with our acquisition of Hospira, as well as cost-reduction and productivity initiatives not associated with acquisitions. In the three months ended April 2, 2017, restructuring credits are largely associated with cost-reduction and productivity initiatives not associated with acquisitions, partially offset by charges related to our acquisitions of Medivation and Anacor. In the three months ended April 1, 2018, Employee terminations primarily include revisions of our estimates of severance benefits. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, many of which may be paid out during periods after termination.
The restructuring activities for the three months ended April 1, 2018 are associated with the following:
•
EH ($14 million income); WRD/GPD ($2 million income); manufacturing operations ($2 million); and Corporate ($4 million).
The restructuring activities for the three months ended April 2, 2017 are associated with the following:
•
IH ($7 million); EH ($18 million income); WRD/GPD ($13 million income); manufacturing operations ($17 million); and Corporate ($2 million).
(b) 
Transaction costs represent external costs for banking, legal, accounting and other similar services, virtually all of which in the first quarter of 2017 were directly related to our acquisition of Medivation.
(c) 
Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes. In the first quarters of 2018 and 2017, integration costs primarily relate to our acquisition of Hospira.
(d) 
In the three months ended April 1, 2018, represents the net pension curtailments and settlements other than service costs reclassified from employee terminations and integration costs to Other (income)/deductions––net upon the adoption of a new accounting standard in the first quarter of 2018. In the three months ended April 2, 2017, composed of (i) $48 million, representing the net pension curtailments and settlements other than service costs reclassified to Other (income)/deductions––net upon the retrospective adoption of a new accounting standard in the first quarter of 2018 and (ii) $25 million, representing the net periodic benefit costs, excluding service costs, reclassified to Other (income)/deductions––net as a result of the retrospective adoption of a new accounting standard in the first quarter of 2018. These costs represent accelerated amortization of actuarial losses and prior service costs upon the settlement of the remaining obligation associated with the Hospira U.S. qualified defined benefit pension plan. For additional information, see Note 1B.
(e) 
Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
(f) 
Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
Schedule of Components of and Changes in Restructuring Accruals
The following table provides the components of and changes in our restructuring accruals:
(MILLIONS OF DOLLARS)
 
Employee
Termination Costs

 
Asset
Impairment Charges

 
Exit Costs

 
Accrual

Balance, December 31, 2017(a)
 
$
1,039

 
$
—

 
$
66

 
$
1,105

Provision/(credit)
 
(8
)
 
2

 
(3
)
 
(9
)
Utilization and other(b)
 
(85
)
 
(2
)
 
(14
)
 
(100
)
Balance, April 1, 2018(c)
 
$
946

 
$
—

 
$
49

 
$
995


(a) 
Included in Other current liabilities ($643 million) and Other noncurrent liabilities ($462 million).
(b) 
Includes adjustments for foreign currency translation.
(c) 
Included in Other current liabilities ($565 million) and Other noncurrent liabilities ($431 million).
v3.8.0.1
Other (Income)/Deductions - Net (Tables)
 3 Months Ended
Apr. 01, 2018
Other Income and Expenses [Abstract]  
Schedule of Other (Income)/Deductions - Net
The following table provides components of Other (income)/deductions––net:
 
 
Three Months Ended
(MILLIONS OF DOLLARS)
 
April 1,
2018


April 2,
2017

Interest income
 
$
(77
)
 
$
(81
)
Interest expense
 
310

 
309

Net interest expense
 
233

 
228

Royalty-related income
 
(96
)
 
(86
)
Net gains on asset disposals(a)
 
(19
)
 
(90
)
Income from collaborations, out-licensing arrangements and sales of compound/product rights(b)
 
(142
)
 
(47
)
Net unrealized gains on equity securities(c)
 
(111
)
 
—

Net periodic benefit costs/(credits) other than service costs(d)
 
(82
)
 
62

Certain legal matters, net
 
(19
)
 
8

Certain asset impairments
 
—

 
12

Loss on sale of HIS net assets(e)
 
3

 
37

Business and legal entity alignment costs(f)
 
3

 
21

Other, net(g)
 
51

 
(84
)
Other (income)/deductions––net
 
$
(178
)
 
$
60


(a) 
In the first quarter of 2018, primarily includes net gains on sales of investments in equity and debt securities (approximately $12 million). In the first quarter of 2017, primarily includes net gains on sales of investments in equity and debt securities (approximately $42 million) and a gain on sale of property (approximately $48 million).
(b) 
Includes income from upfront and milestone payments from our collaboration partners and income from out-licensing arrangements and sales of compound/product rights. In the first quarter of 2018, primarily includes, among other things, a $75 million milestone payment received from Shire related to their first dosing of a patient in a Phase III clinical trial of a compound out-licensed by Pfizer to Shire for the treatment of ulcerative colitis, and a $40 million milestone payment from Merck in conjunction with the approval of ertugliflozin in the EU. For additional information, see Note 2C and Note 2D.
(c) 
Represents the unrealized net gains on equity securities reflecting the adoption of a new accounting standard in the first quarter of 2018. Approximately $61 million of this unrealized gain relates to our investment in ICU Medical stock, which is held by an international entity and therefore valued as of February 23, 2018, the international quarter end. Prior to the adoption of the new standard, net unrealized gains and losses on virtually all readily tradeable equity securities were reported in Accumulated other comprehensive income. For additional information, see Note 1B and Note 7B.
(d) 
Represents the net periodic benefit costs/(credits), excluding service costs, as a result of the adoption of a new accounting standard in the first quarter of 2018. Effective January 1, 2018, the U.S. Pfizer Consolidated Pension Plan was frozen to future benefit accruals and for the first quarter of 2018, resulted in the recognition of lower net periodic benefit costs due to the extension of the amortization period for the actuarial losses and the elimination of service costs. There was also a greater than expected gain on plan assets due to a higher plan asset base compared to the first quarter of 2017. For additional information, see Note 1B and Note 10.
(e)  
In the first quarter of 2018 and 2017, represents an incremental charge to amounts previously recorded in 2016 to write down the HIS net assets to fair value less costs to sell related to the sale of HIS net assets to ICU Medical on February 3, 2017. For additional information, see Note 2B.
(f) 
In the first quarter of 2018 and 2017, represents expenses for changes to our infrastructure to align our commercial operations, including costs to internally separate our businesses into distinct legal entities, as well as to streamline our intercompany supply operations to better support each business.
(g) 
In the first quarter of 2018, primarily includes, among other things, charges of $102 million, reflecting the change in the fair value of contingent consideration, partially offset by dividend income of $59 million from our investment in ViiV. In the first quarter of 2017, primarily includes, among other things, dividend income of $43 million from our investment in ViiV.
v3.8.0.1
Tax Matters (Tables)
 3 Months Ended
Apr. 01, 2018
Income Tax Disclosure [Abstract]  
Schedule of Tax Provision (Benefit) on Other Comprehensive Income/(Loss)
The following table provides the components of Tax provision on other comprehensive (loss)/income:
 
 
Three Months Ended
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

Foreign currency translation adjustments, net(a)
 
$
(34
)
 
$
(21
)
Unrealized holding losses on derivative financial instruments, net
 
(4
)
 
3

Reclassification adjustments for (gains)/losses included in net income
 
(7
)
 
(52
)
Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b)
 
1

 
—

 
 
(9
)
 
(49
)
Unrealized holding gains on available-for-sale securities, net
 
20

 
38

Reclassification adjustments for (gains)/losses included in net income
 
(22
)
 
11

Reclassification adjustments for tax on unrealized gains from AOCI to Retained earnings(c)
 
(45
)
 
—

 
 
(47
)
 
48

Benefit plans: actuarial gains, net
 
38

 
—

Reclassification adjustments related to amortization
 
14

 
50

Reclassification adjustments related to settlements, net
 
9

 
12

Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b)
 
637

 
—

Other
 
(20
)
 
5

 
 
677

 
66

Benefit plans: prior service (costs)/credits and other, net
 
—

 
—

Reclassification adjustments related to amortization
 
(11
)
 
(17
)
Reclassification adjustments related to curtailments, net
 
(7
)
 
(3
)
Reclassification adjustments of certain tax effects from AOCI to Retained earnings(b)
 
(144
)
 
—

Other
 
6

 
—

 
 
(155
)
 
(19
)
Tax provision on other comprehensive (loss)/income
 
$
432

 
$
25


(a) 
Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.
(b) 
For additional information on the adoption of a new accounting standard related to reclassification of certain tax effects from AOCI, see Note 1B.
(c) 
For additional information on the adoption of a new accounting standard related to financial assets and liabilities, see Note 1B.
v3.8.0.1
Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests (Tables)
 3 Months Ended
Apr. 01, 2018
Equity [Abstract]  
Schedule of Changes in Accumulated Other Comprehensive Loss, Net of Tax
The following table provides the changes, net of tax, in Accumulated other comprehensive loss:
 
 
Net Unrealized Gains/(Losses)
 
Benefit Plans
 
 
(MILLIONS OF DOLLARS)
 
Foreign Currency Translation Adjustments

 
Derivative Financial Instruments

 
Available-For-Sale Securities

 
Actuarial Gains/(Losses)

 
Prior Service (Costs)/Credits and Other

 
Accumulated Other Comprehensive Income/(Loss)

Balance, December 31, 2017
 
$
(5,180
)
 
$
(30
)
 
$
401

 
$
(5,262
)
 
$
750

 
$
(9,321
)
Other comprehensive income/(loss) due to the adoption of new accounting standards(a)
 
(2
)
 
(1
)
 
(416
)
 
(637
)
 
144

 
(913
)
Other comprehensive income/(loss)(b)
 
808

 
(59
)
 
(12
)
 
135

 
(39
)
 
832

Balance, April 1, 2018
 
$
(4,375
)
 
$
(90
)
 
$
(28
)
 
$
(5,764
)
 
$
855

 
$
(9,402
)
(a) 
Amounts represent the cumulative effect adjustments as of January 1, 2018 from the adoption of new accounting standards related to (i) financial assets and liabilities and (ii) the reclassification of certain tax effects from AOCI. For additional information, see Note 1B.
(b) 
Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests of $1 million income for the first three months of 2018.
v3.8.0.1
Financial Instruments (Tables)
 3 Months Ended
Apr. 01, 2018
Financial Instruments [Abstract]  
Schedule of Financial Assets and Liabilities Measured At Fair Value On a Recurring Basis
The following table presents the financial assets and liabilities measured at fair value using a market approach on a recurring basis by balance sheet categories and fair value hierarchy level as defined in Notes to Consolidated Financial Statements––Note 1E. Basis of Presentation and Significant Accounting Policies: Fair Value in Pfizer’s 2017 Financial Report, in valuing financial instruments on a recurring basis:
 
 
Total
 
Level 1
 
Level 2
 
Total
 
Level 1
 
Level 2
(MILLIONS OF DOLLARS)
 
April 1, 2018
 
December 31, 2017
Financial assets measured at fair value on a recurring basis:
 
 
 
 
 
 
 
 
 
 
 
 
Short-term investments
 
 
 
 
 
 
 
 
 
 
 
 
Classified as equity securities:
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 
$
1,054

 
$
—

 
$
1,054

 
$
2,115

 
$
—

 
$
2,115

Equity(a)
 
31

 
20

 
11

 
35

 
16

 
19

 
 
1,085

 
20

 
1,065

 
2,150

 
16

 
2,134

Classified as available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
Government and agency—non-U.S.
 
3,370

 
—

 
3,370

 
12,242

 
—

 
12,242

Corporate
 
3,581

 
—

 
3,581

 
2,766

 
—

 
2,766

Government—U.S.
 
—

 
—

 
—

 
252

 
—

 
252

Agency asset-backed—U.S.
 
22

 
—

 
22

 
23

 
—

 
23

Other asset-backed
 
33

 
—

 
33

 
79

 
—

 
79

 
 
7,006

 
—

 
7,006

 
15,362

 
—

 
15,362

Total short-term investments
 
8,091

 
20

 
8,071

 
17,512

 
16

 
17,496

Other current assets
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
93

 
—

 
93

 
104

 
—

 
104

Foreign exchange contracts
 
196

 
—

 
196

 
234

 
—

 
234

Total other current assets
 
289

 
—

 
289

 
337

 
—

 
337

Long-term investments
 
 
 
 
 
 
 
 
 
 
 
 
Classified as equity securities:
 
 
 
 
 
 
 
 
 
 
 
 
Equity(a)
 
1,497

 
1,465

 
32

 
1,440

 
1,398

 
42

Classified as trading securities:
 
 
 
 
 
 
 
 
 
 
 
 
Debt
 
60

 
60

 
—

 
73

 
73

 
—

 
 
1,557

 
1,525

 
32

 
1,514

 
1,472

 
42

Classified as available-for-sale debt securities:
 
 
 
 
 
 
 
 
 
 
 
 
Government and agency—non-U.S.
 
247

 
—

 
247

 
387

 
—

 
387

Corporate
 
4,103

 
46

 
4,058

 
4,172

 
36

 
4,136

Government—U.S.
 
465

 
—

 
465

 
495

 
—

 
495

Other asset-backed
 
17

 
—

 
17

 
35

 
—

 
35

 
 
4,833

 
46

 
4,787

 
5,090

 
36

 
5,054

Total long-term investments
 
6,390

 
1,571

 
4,819

 
6,603

 
1,507

 
5,096

Other noncurrent assets
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
325

 
—

 
325

 
477

 
—

 
477

Foreign exchange contracts
 
92

 
—

 
92

 
7

 
—

 
7

Total other noncurrent assets
 
418

 
—

 
418

 
484

 
—

 
484

Total assets
 
$
15,188

 
$
1,590

 
$
13,597

 
$
24,937

 
$
1,523

 
$
23,414

 
 
 
 
 
 
 
 
 
 
 
 
 
Financial liabilities measured at fair value on a recurring basis:
 
 
 
 
 
 
 
 
 
 
 
 
Other current liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
$
2

 
$
—

 
$
2

 
$
1

 
$
—

 
$
1

Foreign exchange contracts
 
387

 
—

 
387

 
201

 
—

 
201

Total other current liabilities
 
389

 
—

 
389

 
201

 
—

 
201

Other noncurrent liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
424

 
—

 
424

 
177

 
—

 
177

Foreign exchange contracts
 
190

 
—

 
190

 
313

 
—

 
313

Total other noncurrent liabilities
 
614

 
—

 
614

 
490

 
—

 
490

Total liabilities
 
$
1,003

 
$
—

 
$
1,003

 
$
691

 
$
—

 
$
691

(a) 
As of April 1, 2018 and December 31, 2017, equity securities of $31 million and $42 million, respectively, are held in trust for benefits attributable to the former Pharmacia Savings Plus Plan.
Schedule of Financial Liabilities Not Measured At Fair Value On a Recurring Basis
The following table presents the financial liabilities not measured at fair value on a recurring basis, including the carrying values and estimated fair values:
 
 
April 1, 2018
 
December 31, 2017
 
 
Carrying Value
 
Estimated Fair Value
 
Carrying Value
 
Estimated Fair Value
(MILLIONS OF DOLLARS)
 
 
 
Total
 
Level 2
 
 
 
Total
 
Level 2
Financial Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt, excluding the current portion
 
$
31,831

 
$
33,303

 
$
33,303

 
$
33,538

 
$
37,253

 
$
37,253
Investments by Classification Type
The following table represents our investments by classification type:
(MILLIONS OF DOLLARS)
 
April 1, 2018
 
December 31, 2017
Short-term investments
 
 
 
 
Equity securities
 
$
1,085

 
$
2,150

Available-for-sale debt securities
 
7,006

 
15,362

Held-to-maturity debt securities
 
1,028

 
1,138

Total Short-term investments
 
$
9,119

 
$
18,650

 
 
 
 
 
Long-term investments
 
 
 
 
Equity securities
 
$
1,557

 
$
1,514

Available-for-sale debt securities
 
4,833

 
5,090

Held-to-maturity debt securities
 
78

 
4

Private equity investments carried at equity-method or cost
 
477

 
408

Total Long-term investments
 
$
6,945

 
$
7,015

Held-to-maturity cash equivalents
 
$
876

 
$
719
Schedule of Held-to-maturity Securities
At April 1, 2018, the investment securities portfolio consisted of debt securities that were virtually all investment-grade.

Information on investments in debt and equity securities at April 1, 2018 and December 31, 2017 is as follows, including, as of April 1, 2018, the contractual maturities, or as necessary, the estimated maturities, of the available-for-sale and held-to maturity debt securities:
 
 
April 1, 2018
 
December 31, 2017
 
 
 
 
Gross Unrealized
 
 
 
Maturities (in Years)
 
 
 
 
Gross Unrealized
 
 
 
(MILLIONS OF DOLLARS)
 
Amortized Cost

 
Gains

 
Losses

 
Fair Value

 
Within 1

 
Over 1
to 5

 
Over 5

 
Total

 
Amortized Cost

 
Gains

 
Losses

 
Fair Value

Available-for-sale debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government and agency––non-U.S.
 
$
3,536

 
$
102

 
$
(21
)
 
$
3,617

 
$
3,370

 
$
247

 
$
—

 
$
3,617

 
$
12,616

 
$
61

 
$
(48
)
 
$
12,629

Corporate(a)
 
7,771

 
6

 
(93
)
 
7,685

 
3,581

 
2,674

 
1,430

 
7,685

 
6,955

 
15

 
(33
)
 
6,938

Government––U.S.
 
490

 
—

 
(25
)
 
466

 
—

 
462

 
3

 
466

 
765

 
—

 
(19
)
 
747

Agency asset-backed––U.S.
 
23

 
—

 
(1
)
 
22

 
22

 
—

 
—

 
22

 
24

 
—

 
(1
)
 
24

Other asset-backed(b)
 
50

 
—

 
—

 
50

 
33

 
15

 
2

 
50

 
114

 
—

 
—

 
114

Held-to-maturity debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits and other
 
1,578

 
—

 
—

 
1,578

 
1,500

 
74

 
4

 
1,578

 
1,091

 
—

 
—

 
1,091

Government and agency––non-U.S.
 
404

 
—

 
—

 
404

 
404

 
—

 
—

 
404

 
770

 
—

 
—

 
770

Total debt securities
 
$
13,852

 
$
108

 
$
(139
)
 
$
13,821

 
$
8,910

 
$
3,472

 
$
1,439

 
$
13,821

 
$
22,337

 
$
77

 
$
(100
)
 
$
22,313

Available-for-sale equity securities(c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 

 


 


 


 
 
 
 
 
 
 
 
 
$
2,115

 
$
—

 
$
—

 
$
2,115

Equity
 

 


 


 


 
 
 
 
 
 
 
 
 
728

 
586

 
(124
)
 
1,190

Total available-for-sale equity securities
 

 


 


 


 
 
 
 
 
 
 
 
 
$
2,843

 
$
586

 
$
(124
)
 
$
3,304

(a) 
Issued by a diverse group of corporations.
(b) 
Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.
(c) 
Upon the 2018 adoption of a new accounting standard related to financial assets and liabilities, available-for-sale equity securities were classified as equity securities. For additional information see Note 1B.
Schedule of Available-for-sale Securities
At April 1, 2018, the investment securities portfolio consisted of debt securities that were virtually all investment-grade.

Information on investments in debt and equity securities at April 1, 2018 and December 31, 2017 is as follows, including, as of April 1, 2018, the contractual maturities, or as necessary, the estimated maturities, of the available-for-sale and held-to maturity debt securities:
 
 
April 1, 2018
 
December 31, 2017
 
 
 
 
Gross Unrealized
 
 
 
Maturities (in Years)
 
 
 
 
Gross Unrealized
 
 
 
(MILLIONS OF DOLLARS)
 
Amortized Cost

 
Gains

 
Losses

 
Fair Value

 
Within 1

 
Over 1
to 5

 
Over 5

 
Total

 
Amortized Cost

 
Gains

 
Losses

 
Fair Value

Available-for-sale debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government and agency––non-U.S.
 
$
3,536

 
$
102

 
$
(21
)
 
$
3,617

 
$
3,370

 
$
247

 
$
—

 
$
3,617

 
$
12,616

 
$
61

 
$
(48
)
 
$
12,629

Corporate(a)
 
7,771

 
6

 
(93
)
 
7,685

 
3,581

 
2,674

 
1,430

 
7,685

 
6,955

 
15

 
(33
)
 
6,938

Government––U.S.
 
490

 
—

 
(25
)
 
466

 
—

 
462

 
3

 
466

 
765

 
—

 
(19
)
 
747

Agency asset-backed––U.S.
 
23

 
—

 
(1
)
 
22

 
22

 
—

 
—

 
22

 
24

 
—

 
(1
)
 
24

Other asset-backed(b)
 
50

 
—

 
—

 
50

 
33

 
15

 
2

 
50

 
114

 
—

 
—

 
114

Held-to-maturity debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits and other
 
1,578

 
—

 
—

 
1,578

 
1,500

 
74

 
4

 
1,578

 
1,091

 
—

 
—

 
1,091

Government and agency––non-U.S.
 
404

 
—

 
—

 
404

 
404

 
—

 
—

 
404

 
770

 
—

 
—

 
770

Total debt securities
 
$
13,852

 
$
108

 
$
(139
)
 
$
13,821

 
$
8,910

 
$
3,472

 
$
1,439

 
$
13,821

 
$
22,337

 
$
77

 
$
(100
)
 
$
22,313

Available-for-sale equity securities(c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 

 


 


 


 
 
 
 
 
 
 
 
 
$
2,115

 
$
—

 
$
—

 
$
2,115

Equity
 

 


 


 


 
 
 
 
 
 
 
 
 
728

 
586

 
(124
)
 
1,190

Total available-for-sale equity securities
 

 


 


 


 
 
 
 
 
 
 
 
 
$
2,843

 
$
586

 
$
(124
)
 
$
3,304

(a) 
Issued by a diverse group of corporations.
(b) 
Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.
(c) 
Upon the 2018 adoption of a new accounting standard related to financial assets and liabilities, available-for-sale equity securities were classified as equity securities. For additional information see Note 1B.
Contractual Maturities of Available-for-sale and Held-to-maturity Debt Securities
At April 1, 2018, the investment securities portfolio consisted of debt securities that were virtually all investment-grade.

Information on investments in debt and equity securities at April 1, 2018 and December 31, 2017 is as follows, including, as of April 1, 2018, the contractual maturities, or as necessary, the estimated maturities, of the available-for-sale and held-to maturity debt securities:
 
 
April 1, 2018
 
December 31, 2017
 
 
 
 
Gross Unrealized
 
 
 
Maturities (in Years)
 
 
 
 
Gross Unrealized
 
 
 
(MILLIONS OF DOLLARS)
 
Amortized Cost

 
Gains

 
Losses

 
Fair Value

 
Within 1

 
Over 1
to 5

 
Over 5

 
Total

 
Amortized Cost

 
Gains

 
Losses

 
Fair Value

Available-for-sale debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Government and agency––non-U.S.
 
$
3,536

 
$
102

 
$
(21
)
 
$
3,617

 
$
3,370

 
$
247

 
$
—

 
$
3,617

 
$
12,616

 
$
61

 
$
(48
)
 
$
12,629

Corporate(a)
 
7,771

 
6

 
(93
)
 
7,685

 
3,581

 
2,674

 
1,430

 
7,685

 
6,955

 
15

 
(33
)
 
6,938

Government––U.S.
 
490

 
—

 
(25
)
 
466

 
—

 
462

 
3

 
466

 
765

 
—

 
(19
)
 
747

Agency asset-backed––U.S.
 
23

 
—

 
(1
)
 
22

 
22

 
—

 
—

 
22

 
24

 
—

 
(1
)
 
24

Other asset-backed(b)
 
50

 
—

 
—

 
50

 
33

 
15

 
2

 
50

 
114

 
—

 
—

 
114

Held-to-maturity debt securities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Time deposits and other
 
1,578

 
—

 
—

 
1,578

 
1,500

 
74

 
4

 
1,578

 
1,091

 
—

 
—

 
1,091

Government and agency––non-U.S.
 
404

 
—

 
—

 
404

 
404

 
—

 
—

 
404

 
770

 
—

 
—

 
770

Total debt securities
 
$
13,852

 
$
108

 
$
(139
)
 
$
13,821

 
$
8,910

 
$
3,472

 
$
1,439

 
$
13,821

 
$
22,337

 
$
77

 
$
(100
)
 
$
22,313

Available-for-sale equity securities(c)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Money market funds
 

 


 


 


 
 
 
 
 
 
 
 
 
$
2,115

 
$
—

 
$
—

 
$
2,115

Equity
 

 


 


 


 
 
 
 
 
 
 
 
 
728

 
586

 
(124
)
 
1,190

Total available-for-sale equity securities
 

 


 


 


 
 
 
 
 
 
 
 
 
$
2,843

 
$
586

 
$
(124
)
 
$
3,304

(a) 
Issued by a diverse group of corporations.
(b) 
Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.
(c) 
Upon the 2018 adoption of a new accounting standard related to financial assets and liabilities, available-for-sale equity securities were classified as equity securities. For additional information see Note 1B.
Schedule of Gains and Losses on Investment Securities
The following table presents the unrealized gains and losses for the period that relates to equity securities still held at the reporting date:
(MILLIONS OF DOLLARS)
 
April 1, 2018

Net gains recognized during the period on equity securities(a)
 
$
98

Less: Net losses recognized during the period on equity securities sold during the period
 
(12
)
Unrealized gains during the reporting period on equity securities still held at the reporting date
 
86


(a) 
Includes $111 million of unrealized net gains reflecting the adoption of a new accounting standard in the first quarter of 2018 (see Note 1B and Note 4), and $13 million of unrealized loss on other equity securities.
Schedule of Short-term Borrowings
Short-term borrowings include:
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
December 31,
2017

Commercial paper
 
$
4,000

 
$
6,100

Current portion of long-term debt, principal amount
 
4,752

 
3,532

Other short-term borrowings, principal amount(a)
 
257

 
320

Total short-term borrowings, principal amount
 
9,009

 
9,951

Net fair value adjustments related to hedging and purchase accounting
 
10

 
14

Net unamortized discounts, premiums and debt issuance costs
 
(8
)
 
(12
)
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted
 
$
9,010

 
$
9,953

(a) 
Other short-term borrowings primarily include cash collateral. For additional information, see Note 7F.
Schedule of Principal Amounts of Senior Unsecured Long-Term Debt and Adjustments
The following table provides the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
December 31,
2017

Total long-term debt, principal amount
 
$
31,484

 
$
32,783

Net fair value adjustments related to hedging and purchase accounting
 
461

 
872

Net unamortized discounts, premiums and debt issuance costs
 
(122
)
 
(125
)
Other long-term debt
 
8

 
8

Total long-term debt, carried at historical proceeds, as adjusted
 
$
31,831

 
$
33,538

Current portion of long-term debt, carried at historical proceeds
 
$
4,763

 
$
3,546
Schedule of Derivative Instruments
The following table provides the fair value of the derivative financial instruments and the related notional amounts presented between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
(MILLIONS OF DOLLARS)
 
April 1, 2018
 
December 31, 2017
 
 
 
 
Fair Value
 
 
 
Fair Value
 
 
Notional
 
Asset
 
Liability
 
Notional
 
Asset
 
Liability
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts(a)
 
$
18,777

 
$
258

 
$
442

 
$
18,723

 
$
179

 
$
459

Interest rate contracts
 
12,430

 
418

 
426

 
12,430

 
581

 
178

 
 
 
 
676

 
868

 
 
 
760

 
637

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
$
14,510

 
$
31

 
$
134

 
$
14,300

 
$
62

 
$
54

 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
$
707

 
$
1,003

 
 
 
$
822

 
$
691

(a) 
As of April 1, 2018, the notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion.
Schedule of Derivative Assets
The following table provides the fair value of the derivative financial instruments and the related notional amounts presented between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
(MILLIONS OF DOLLARS)
 
April 1, 2018
 
December 31, 2017
 
 
 
 
Fair Value
 
 
 
Fair Value
 
 
Notional
 
Asset
 
Liability
 
Notional
 
Asset
 
Liability
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts(a)
 
$
18,777

 
$
258

 
$
442

 
$
18,723

 
$
179

 
$
459

Interest rate contracts
 
12,430

 
418

 
426

 
12,430

 
581

 
178

 
 
 
 
676

 
868

 
 
 
760

 
637

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
$
14,510

 
$
31

 
$
134

 
$
14,300

 
$
62

 
$
54

 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
$
707

 
$
1,003

 
 
 
$
822

 
$
691

(a) 
As of April 1, 2018, the notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion.
Schedule of Derivative Liabilities
The following table provides the fair value of the derivative financial instruments and the related notional amounts presented between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:
(MILLIONS OF DOLLARS)
 
April 1, 2018
 
December 31, 2017
 
 
 
 
Fair Value
 
 
 
Fair Value
 
 
Notional
 
Asset
 
Liability
 
Notional
 
Asset
 
Liability
Derivatives designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts(a)
 
$
18,777

 
$
258

 
$
442

 
$
18,723

 
$
179

 
$
459

Interest rate contracts
 
12,430

 
418

 
426

 
12,430

 
581

 
178

 
 
 
 
676

 
868

 
 
 
760

 
637

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivatives not designated as hedging instruments:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
$
14,510

 
$
31

 
$
134

 
$
14,300

 
$
62

 
$
54

 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
 
$
707

 
$
1,003

 
 
 
$
822

 
$
691

(a) 
As of April 1, 2018, the notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion.
Information about Gains/(Losses) Incurred to Hedge or Offset Operational Foreign Exchange or Interest Rate Risk
The following table provides information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk:
 
 
Amount of
Gains/(Losses)
Recognized in OID(a), (b)
 
Amount of Gains/(Losses)
Recognized in OCI(a), (c)
 
Amount of Gains/(Losses)
Reclassified from
OCI into OID and COS(a), (c)
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

 
April 1,
2018

 
April 2,
2017

 
April 1,
2018

 
April 2,
2017

Three Months Ended
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments in Cash Flow Hedge Relationships:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts(d)
 
$
—

 
$
(3
)
 
$
(143
)
 
$
(9
)
 
$
(72
)
 
$
242

Amount excluded from effectiveness testing recognized in earnings based on an amortization approach
 
—

 
—

 
28

 
—

 
27

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments in Fair Value Hedge Relationships:
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate contracts
 
(399
)
 
(92
)
 
—

 
—

 
—

 
—

Hedged item gain/(loss)
 
399

 
92

 
—

 
—

 
—

 
—

Foreign exchange contracts
 
(7
)
 
3

 
—

 
—

 
—

 
—

Hedged item gain/(loss)
 
8

 
(3
)
 
—

 
—

 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments in Net Investment Hedge Relationships:
 
 

 
 

 
 

 
 

 
 

 
 

Foreign exchange contracts
 
—

 
—

 
(5
)
 
—

 
—

 
—

The portion of gains/(losses) on foreign exchange contracts excluded from the assessment of hedge effectiveness
 
—

 
—

 
2

 
—

 
6

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:
 
 

 
 

 
 

 
 

 
 

 
 

Foreign currency short-term borrowings(e)
 
—

 
—

 
(42
)
 
—

 
—

 
—

Foreign currency long-term debt(e)
 
—

 
—

 
(92
)
 
(57
)
 
—

 
—

 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative Financial Instruments Not Designated as Hedges:
 
 
 
 
 
 
 
 
 
 
 
 
Foreign exchange contracts
 
(55
)
 
(140
)
 
—

 
—

 
—

 
—

All other net
 
—

 
—

 
—

 
—

 
—

 
—

 
 
$
(55
)
 
$
(143
)
 
$
(251
)
 
$
(66
)
 
$
(39
)
 
$
242

(a) 
OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income.
(b) 
For the three months ended April 2, 2017, there was no significant ineffectiveness.
(c) 
For derivative financial instruments in cash flow hedge relationships, the gains and losses are included in Other comprehensive (loss)/income––Unrealized holding losses on derivative financial instruments, net. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in Other comprehensive (loss)/income––Foreign currency translation adjustments, net.
(d) 
Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $156 million within the next 12 months into Cost of sales. The maximum length of time over which we are hedging future foreign exchange cash flow relates to our $1.9 billion U.K. pound debt maturing in 2043.
(e) 
Short-term borrowings include foreign currency short-term borrowings with carrying values of $1.5 billion as of April 1, 2018, which are used as hedging instruments in net investment hedges. Long-term debt includes foreign currency long-term borrowings with carrying values of $3.3 billion as of April 1, 2018, which are used as hedging instruments in net investment hedges.
Schedule of Amounts Recorded In Balance Sheet Related to Cumulative Adjustments for Fair Value Hedges
The following table provides the amounts recorded in our condensed consolidated balance sheet related to cumulative basis adjustments for fair value hedges:
 
 
Carrying Amount of Hedged Assets/Liabilities

 
Cumulative Amount of Fair Value Hedging Adjustment Gains/(Losses) Included in the Carrying Amount of the Hedged Assets/Liabilities

MILLIONS OF DOLLARS
 
April 1,
2018

 
April 1,
2018

Short-term investments
 
$
286

 
$
(1
)
Long-term investments
 
45

 
(1
)
Short-term borrowings, including current portion of long-term debt
 
999

 
1

Long-term debt
 
11,372

 
100

The following table provides the total amount of each income and expense line in which the results of fair value or cash flow hedges are recorded:
 
 
Three Months Ended
(MILLIONS OF DOLLARS
 
April 1, 2018

Cost of sales
 
$
2,563

Other (income)/deductions—net
 
(178
)
Schedule of Amounts Recorded In Balance Sheet Related to Cumulative Adjustments for Fair Value Hedges
The following table provides the total amount of each income and expense line in which the results of fair value or cash flow hedges are recorded:
 
 
Three Months Ended
(MILLIONS OF DOLLARS
 
April 1, 2018

Cost of sales
 
$
2,563

Other (income)/deductions—net
 
(178
)
v3.8.0.1
Inventories (Tables)
 3 Months Ended
Apr. 01, 2018
Inventory Disclosure [Abstract]  
Schedule of Components of Inventories, Current
The following table provides the components of Inventories:
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
December 31,
2017

Finished goods
 
$
2,838

 
$
2,883

Work-in-process
 
4,485

 
3,908

Raw materials and supplies
 
825

 
788

Inventories(a)
 
$
8,148

 
$
7,578

Noncurrent inventories not included above(b)
 
$
640

 
$
683


(a) 
The change from December 31, 2017 reflects increases for certain products to meet targeted levels in the normal course of business, including supply recovery and inventory build for new product launches, as well as an increase due to foreign exchange.
(b) 
Included in Other noncurrent assets. There are no recoverability issues associated with these amounts.
Schedule of Components of Inventories, Noncurrent
The following table provides the components of Inventories:
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
December 31,
2017

Finished goods
 
$
2,838

 
$
2,883

Work-in-process
 
4,485

 
3,908

Raw materials and supplies
 
825

 
788

Inventories(a)
 
$
8,148

 
$
7,578

Noncurrent inventories not included above(b)
 
$
640

 
$
683


(a) 
The change from December 31, 2017 reflects increases for certain products to meet targeted levels in the normal course of business, including supply recovery and inventory build for new product launches, as well as an increase due to foreign exchange.
(b) 
Included in Other noncurrent assets. There are no recoverability issues associated with these amounts.
v3.8.0.1
Identifiable Intangible Assets and Goodwill (Tables)
 3 Months Ended
Apr. 01, 2018
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Finite-Lived Intangible Assets
The following table provides the components of Identifiable intangible assets:
 
 
April 1, 2018
 
December 31, 2017
(MILLIONS OF DOLLARS)
 
Gross
Carrying
Amount

 
Accumulated
Amortization

 
Identifiable
Intangible
Assets, less
Accumulated
Amortization

 
Gross
Carrying
Amount

 
Accumulated
Amortization

 
Identifiable
Intangible
Assets, less
Accumulated
Amortization

Finite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
Developed technology rights
 
$
89,877

 
$
(56,152
)
 
$
33,726

 
$
89,550

 
$
(54,785
)
 
$
34,765

Brands
 
2,149

 
(1,185
)
 
964

 
2,134

 
(1,152
)
 
982

Licensing agreements and other
 
1,969

 
(1,122
)
 
847

 
1,911

 
(1,096
)
 
815

 
 
93,996

 
(58,458
)
 
35,537

 
93,595

 
(57,033
)
 
36,562

Indefinite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
Brands and other
 
6,952

 


 
6,952

 
6,929

 


 
6,929

IPR&D
 
5,201

 


 
5,201

 
5,249

 


 
5,249

 
 
12,153

 


 
12,153

 
12,179

 


 
12,179

Identifiable intangible assets(a)
 
$
106,148

 
$
(58,458
)
 
$
47,690

 
$
105,774

 
$
(57,033
)
 
$
48,741


(a) 
The decrease in Identifiable intangible assets, less accumulated amortization, is primarily due to amortization, partially offset by an increase due to foreign exchange.
Schedule of Indefinite Lived Intangible Assets
The following table provides the components of Identifiable intangible assets:
 
 
April 1, 2018
 
December 31, 2017
(MILLIONS OF DOLLARS)
 
Gross
Carrying
Amount

 
Accumulated
Amortization

 
Identifiable
Intangible
Assets, less
Accumulated
Amortization

 
Gross
Carrying
Amount

 
Accumulated
Amortization

 
Identifiable
Intangible
Assets, less
Accumulated
Amortization

Finite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
Developed technology rights
 
$
89,877

 
$
(56,152
)
 
$
33,726

 
$
89,550

 
$
(54,785
)
 
$
34,765

Brands
 
2,149

 
(1,185
)
 
964

 
2,134

 
(1,152
)
 
982

Licensing agreements and other
 
1,969

 
(1,122
)
 
847

 
1,911

 
(1,096
)
 
815

 
 
93,996

 
(58,458
)
 
35,537

 
93,595

 
(57,033
)
 
36,562

Indefinite-lived intangible assets
 
 
 
 
 
 
 
 
 
 
 
 
Brands and other
 
6,952

 


 
6,952

 
6,929

 


 
6,929

IPR&D
 
5,201

 


 
5,201

 
5,249

 


 
5,249

 
 
12,153

 


 
12,153

 
12,179

 


 
12,179

Identifiable intangible assets(a)
 
$
106,148

 
$
(58,458
)
 
$
47,690

 
$
105,774

 
$
(57,033
)
 
$
48,741


(a) 
The decrease in Identifiable intangible assets, less accumulated amortization, is primarily due to amortization, partially offset by an increase due to foreign exchange.
Identifiable Intangible Assets as a Percentage of Total Identifiable Intangible Assets Less Accumulated Amortization, By Segment
Our identifiable intangible assets are associated with the following, as a percentage of total identifiable intangible assets, less accumulated amortization:
 
 
April 1, 2018
 
 
IH
 
EH
 
WRD
Developed technology rights
 
68
%
 
32
%
 
—
%
Brands, finite-lived
 
75
%
 
25
%
 
—
%
Brands, indefinite-lived
 
71
%
 
29
%
 
—
%
IPR&D
 
82
%
 
11
%
 
7
%
Schedule of Goodwill
The following table provides the components of and changes in the carrying amount of Goodwill:
(MILLIONS OF DOLLARS)
 
IH
 
EH
 
Total
Balance, December 31, 2017
 
$
31,141

 
$
24,811

 
$
55,952

Other(a)
 
213

 
228

 
441

Balance, April 1, 2018
 
$
31,355

 
$
25,039

 
$
56,393


(a) 
Primarily reflects the impact of foreign exchange.
v3.8.0.1
Pension and Postretirement Benefit Plans (Tables)
 3 Months Ended
Apr. 01, 2018
Retirement Benefits [Abstract]  
Schedule of Net Periodic Benefit Costs
The following table provides the components of net periodic benefit cost/(income):
 
 
Three Months Ended
 
 
Pension Plans
 
 
 
 
U.S.
Qualified
 
U.S.
Supplemental
(Non-Qualified)
 
International
 
Postretirement
Plans
(MILLIONS OF DOLLARS)
 
April 1, 2018

 
April 2, 2017

 
April 1, 2018

 
April 2, 2017

 
April 1, 2018

 
April 2, 2017

 
April 1, 2018

 
April 2, 2017

Net periodic benefit cost/(credit)(a):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Service cost(b)
 
$
—

 
$
68

 
$
—

 
$
6

 
$
37

 
$
41

 
$
10

 
$
11

Interest cost
 
151

 
162

 
13

 
14

 
54

 
50

 
18

 
23

Expected return on plan assets
 
(263
)
 
(259
)
 
—

 
—

 
(92
)
 
(84
)
 
(9
)
 
(9
)
Amortization of:
 
 

 
 

 
 

 
 

 
 
 
 

 
 

 
 

Actuarial losses(b)
 
30

 
115

 
4

 
13

 
26

 
28

 
2

 
8

Prior service costs(credits)
 
—

 
2

 
—

 
—

 
(1
)
 
(1
)
 
(45
)
 
(46
)
Curtailments
 
2

 
5

 
—

 
—

 
—

 
—

 
(7
)
 
(7
)
Settlements
 
20

 
31

 
17

 
21

 
—

 
1

 
—

 
—

 
 
$
(58
)
 
$
124

 
$
33

 
$
53

 
$
24

 
$
35

 
$
(31
)
 
$
(21
)

(a) 
We adopted a new accounting standard on January 1, 2018 that requires the net periodic pension and postretirement benefit costs other than service costs be presented in Other (income)/deductions––net on the condensed consolidated statements of income. For additional information, see Note 1B and Note 4.
(b) 
Effective January 1, 2018, we froze two significant defined benefit pension plans to future benefit accruals in the U.S. and U.K. and as a result, service costs for those plans are eliminated. In addition, due to the plan freeze, the average amortization period for the U.S. qualified plans and U.S. supplemental (non-qualified) plans was extended to the expected life expectancy of the plan participants, whereas the average amortization period in prior years utilized the expected future service period of plan participants.
Schedule of Employer Contributions to Pension and Postretirement Plans
As of and for the three months ended April 1, 2018, we contributed and in 2018 expect to contribute from our general assets as follows:
 
 
Pension Plans
 
 
(MILLIONS OF DOLLARS)
 
U.S. Qualified
 
U.S. Supplemental (Non-Qualified)
 
International
 
Postretirement Plans
Contributions from our general assets for the three months ended April 1, 2018
 
$
500

 
$
84

 
$
37

 
$
37

Expected contributions from our general assets during 2018(a)
 
500

 
160

 
229

 
163

(a) 
Contributions expected to be made for 2018 are inclusive of amounts contributed during the three months ended April 1, 2018, including the $500 million voluntary contribution that was made in February 2018 for the U.S. qualified plans, which was considered pre-funding for future anticipated mandatory contributions and is also expected to reduce Pension Benefit Guaranty Corporation variable rate premiums. The U.S. supplemental (non-qualified) pension plan, international pension plan and the postretirement plan contributions from our general assets include direct employer benefit payments.
v3.8.0.1
Earnings Per Common Share Attributable to Common Shareholders (Tables)
 3 Months Ended
Apr. 01, 2018
Earnings Per Share [Abstract]  
Schedule of Basic and Diluted Earning Per Share
The following table provides the detailed calculation of EPS:
 
 
Three Months Ended
(IN MILLIONS)
 
April 1,
2018

 
April 2,
2017

EPS Numerator––Basic
 
 
 
 
Income from continuing operations
 
$
3,571

 
$
3,130

Less: Net income attributable to noncontrolling interests
 
9

 
9

Income from continuing operations attributable to Pfizer Inc.
 
3,562

 
3,121

Less: Preferred stock dividends––net of tax
 
—

 
—

Income from continuing operations attributable to Pfizer Inc. common shareholders
 
3,562

 
3,121

Discontinued operations––net of tax
 
(1
)
 
—

Net income attributable to Pfizer Inc. common shareholders
 
$
3,560

 
$
3,121

EPS Numerator––Diluted
 
 

 
 

Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions
 
$
3,562

 
$
3,121

Discontinued operations––net of tax, attributable to Pfizer Inc. common shareholders and assumed conversions
 
(1
)
 
—

Net income attributable to Pfizer Inc. common shareholders and assumed conversions
 
$
3,561

 
$
3,121

EPS Denominator
 
 

 
 

Weighted-average number of common shares outstanding––Basic
 
5,957

 
6,006

Common-share equivalents: stock options, stock issuable under employee compensation plans, convertible preferred stock and accelerated share repurchase agreements
 
100

 
86

Weighted-average number of common shares outstanding––Diluted
 
6,057

 
6,092

Stock options that had exercise prices greater than the average market price of our common stock issuable under employee compensation plans(a)
 
2

 
48

(a) 
These common stock equivalents were outstanding for the periods presented, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
v3.8.0.1
Segment, Geographic and Other Revenue Information (Tables)
 3 Months Ended
Apr. 01, 2018
Segment Reporting [Abstract]  
Reconciliation of Revenue from Segments to Consolidated
The following table provides selected income statement information by reportable segment:
 
 
Three Months Ended
 
 
Revenues
 
Earnings(a)
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

 
April 1,
2018

 
April 2,
2017

Reportable Segments:
 
 
 
 
 
 
 
 
IH(b)
 
$
7,829

 
$
7,415

 
$
4,930

 
$
4,747

EH(b)
 
5,077

 
5,364

 
2,788

 
3,039

Total reportable segments
 
12,906

 
12,779

 
7,719

 
7,787

Other business activities(c), (d)
 
—

 
—

 
(725
)
 
(688
)
Reconciling Items:
 
 
 
 
 
 

 
 

Corporate(b), (d)
 
—

 
—

 
(1,153
)
 
(1,335
)
Purchase accounting adjustments(d)
 
—

 
—

 
(1,221
)
 
(1,172
)
Acquisition-related costs(d)
 
—

 
—

 
(48
)
 
(124
)
Certain significant items(e)
 
—

 
—

 
(201
)
 
(157
)
Other unallocated(b)
 
—

 
—

 
(244
)
 
(359
)
 
 
$
12,906

 
$
12,779


$
4,127

 
$
3,951

(a) 
Income from continuing operations before provision for taxes on income. IH’s earnings in the first quarter of 2018 and 2017 include dividend income of $59 million and $43 million, respectively, from our investment in ViiV. For additional information, see Note 4.
(b) 
In connection with the StratCO reporting change, in the first quarter of 2017 we reclassified approximately $98 million of costs from IH, approximately $33 million of costs from EH and approximately $9 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.
(c) 
Other business activities includes the costs managed by our WRD and GPD organizations.
(d) 
For a description, see the “Other Costs and Business Activities” section above.
(e) 
Certain significant items are substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.
For Earnings in the first quarter of 2018, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $51 million, (ii) income for certain legal matters of $19 million, (iii) an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $3 million, (iv) charges for business and legal entity alignment of $3 million and (v) other charges of $163 million, which primarily includes $108 million, in the aggregate, for a special one-time bonus paid to virtually all Pfizer colleagues, excluding executives, which was one of several actions taken by us after evaluating the expected positive net impact of the December 2017 enactment of the TCJA on us. For additional information, see Note 2B, Note 3, Note 4 and Note 5.
For Earnings in the first quarter of 2017, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $30 million, (ii) charges for certain legal matters of $8 million, (iii) an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $37 million, (iv) charges for business and legal entity alignment of $21 million and (v) other charges of $61 million. For additional information, see Note 2B, Note 3 and Note 4.
Reconciliation of Operating Profit (Loss) from Segments to Consolidated
The following table provides selected income statement information by reportable segment:
 
 
Three Months Ended
 
 
Revenues
 
Earnings(a)
(MILLIONS OF DOLLARS)
 
April 1,
2018

 
April 2,
2017

 
April 1,
2018

 
April 2,
2017

Reportable Segments:
 
 
 
 
 
 
 
 
IH(b)
 
$
7,829

 
$
7,415

 
$
4,930

 
$
4,747

EH(b)
 
5,077

 
5,364

 
2,788

 
3,039

Total reportable segments
 
12,906

 
12,779

 
7,719

 
7,787

Other business activities(c), (d)
 
—

 
—

 
(725
)
 
(688
)
Reconciling Items:
 
 
 
 
 
 

 
 

Corporate(b), (d)
 
—

 
—

 
(1,153
)
 
(1,335
)
Purchase accounting adjustments(d)
 
—

 
—

 
(1,221
)
 
(1,172
)
Acquisition-related costs(d)
 
—

 
—

 
(48
)
 
(124
)
Certain significant items(e)
 
—

 
—

 
(201
)
 
(157
)
Other unallocated(b)
 
—

 
—

 
(244
)
 
(359
)
 
 
$
12,906

 
$
12,779


$
4,127

 
$
3,951

(a) 
Income from continuing operations before provision for taxes on income. IH’s earnings in the first quarter of 2018 and 2017 include dividend income of $59 million and $43 million, respectively, from our investment in ViiV. For additional information, see Note 4.
(b) 
In connection with the StratCO reporting change, in the first quarter of 2017 we reclassified approximately $98 million of costs from IH, approximately $33 million of costs from EH and approximately $9 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.
(c) 
Other business activities includes the costs managed by our WRD and GPD organizations.
(d) 
For a description, see the “Other Costs and Business Activities” section above.
(e) 
Certain significant items are substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.
For Earnings in the first quarter of 2018, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $51 million, (ii) income for certain legal matters of $19 million, (iii) an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $3 million, (iv) charges for business and legal entity alignment of $3 million and (v) other charges of $163 million, which primarily includes $108 million, in the aggregate, for a special one-time bonus paid to virtually all Pfizer colleagues, excluding executives, which was one of several actions taken by us after evaluating the expected positive net impact of the December 2017 enactment of the TCJA on us. For additional information, see Note 2B, Note 3, Note 4 and Note 5.
For Earnings in the first quarter of 2017, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $30 million, (ii) charges for certain legal matters of $8 million, (iii) an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $37 million, (iv) charges for business and legal entity alignment of $21 million and (v) other charges of $61 million. For additional information, see Note 2B, Note 3 and Note 4.
Schedule of Revenues by Geographic Region
The following table provides revenues by geographic area:
 

Three Months Ended
(MILLIONS OF DOLLARS)

April 1,
2018


April 2,
2017


%
Change

U.S.

$
6,275


$
6,637


(5
)
Developed Europe(a)

2,092


2,021


4

Developed Rest of World(b)

1,461


1,554


(6
)
Emerging Markets(c)

3,078


2,567


20

Revenues

$
12,906


$
12,779


1

(a) 
Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland. Revenues denominated in euros were $1.7 billion and $1.6 billion in the first quarter of 2018 and 2017, respectively.
(b) 
Developed Rest of World region includes the following markets: Japan, Canada, Australia, South Korea and New Zealand.
(c) 
Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Eastern Europe, Africa, the Middle East, Central Europe and Turkey.
Schedule of Significant Product Revenues
The following table provides detailed revenue information:
(MILLIONS OF DOLLARS)
 
 
 
Three Months Ended
PRODUCT
 
PRIMARY INDICATIONS OR CLASS
 
April 1,
2018

 
April 2,
2017

TOTAL REVENUES
 
 
 
$
12,906

 
$
12,779

PFIZER INNOVATIVE HEALTH (IH)(a)
 
$
7,829

 
$
7,415

Internal Medicine
 
 
 
$
2,347

 
$
2,377

Lyrica IH(b)
 
Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury
 
1,131

 
1,131

Eliquis alliance revenues and direct sales
 
Atrial fibrillation, deep vein thrombosis, pulmonary embolism
 
765

 
564

Chantix/Champix
 
An aid to smoking cessation treatment in adults 18 years of age or older
 
251

 
239

BMP2
 
Development of bone and cartilage
 
73

 
62

Toviaz
 
Overactive bladder
 
60

 
63

Viagra IH(c)
 
Erectile dysfunction
 
—

 
249

All other Internal Medicine
 
Various
 
66

 
69

Vaccines
 
 
 
$
1,463

 
$
1,465

Prevnar 13/Prevenar 13
 
Vaccines for prevention of pneumococcal disease
 
1,380

 
1,392

All other Vaccines
 
Various
 
83

 
73

Oncology
 
 
 
$
1,697

 
$
1,347

Ibrance
 
Advanced breast cancer
 
933

 
679

Sutent
 
Advanced and/or metastatic RCC, adjuvant RCC, refractory GIST (after disease progression on, or intolerance to, imatinib mesylate) and advanced pancreatic neuroendocrine tumor
 
262

 
250

Xtandi alliance revenues
 
Advanced prostate cancer
 
159

 
131

Xalkori
 
ALK-positive and ROS1-positive advanced NSCLC
 
153

 
142

Inlyta
 
Advanced RCC
 
74

 
85

Bosulif
 
Philadelphia chromosome–positive chronic myelogenous leukemia
 
60

 
47

All other Oncology
 
Various
 
57

 
14

Inflammation & Immunology (I&I)
 
 
 
$
869

 
$
871

Enbrel (Outside the U.S. and Canada)
 
Rheumatoid arthritis, juvenile idiopathic arthritis, psoriatic arthritis, plaque psoriasis, pediatric plaque psoriasis, ankylosing spondylitis and nonradiographic axial spondyloarthritis
 
506

 
588

Xeljanz
 
Rheumatoid arthritis; psoriatic arthritis
 
326

 
250

Eucrisa

Mild-to-moderate atopic dermatitis (eczema)
 
26

 
9

All other I&I
 
Various
 
11

 
24

Rare Disease
 
 
 
$
549

 
$
507

BeneFIX
 
Hemophilia
 
147

 
149

Genotropin
 
Replacement of human growth hormone
 
132

 
104

Refacto AF/Xyntha
 
Hemophilia
 
130

 
130

Somavert
 
Acromegaly
 
63

 
56

All other Rare Disease
 
Various
 
76

 
67

Consumer Healthcare
 
 
 
$
905

 
$
848

PFIZER ESSENTIAL HEALTH (EH)(d)
 
 
 
$
5,077

 
$
5,364

Legacy Established Products (LEP)(e)
 
 
 
$
2,636

 
$
2,606

Lipitor
 
Reduction of LDL cholesterol
 
511

 
404

Norvasc
 
Hypertension
 
254

 
228

Premarin family
 
Symptoms of menopause
 
191

 
228

Zithromax
 
Bacterial infections
 
90

 
79

Zoloft
 
Depression and certain anxiety disorders
 
74

 
68

Xalatan/Xalacom
 
Glaucoma and ocular hypertension
 
72

 
77

Effexor
 
Depression and certain anxiety disorders
 
71

 
66

Sildenafil Citrate
 
Erectile dysfunction
 
62

 
—

Xanax
 
Anxiety disorders
 
54

 
55

EpiPen
 
Epinephrine injection used in treatment of life-threatening allergic reactions
 
52

 
81

All other LEP
 
Various
 
1,203

 
1,321

(MILLIONS OF DOLLARS)
 
 
 
Three Months Ended
PRODUCT
 
PRIMARY INDICATIONS OR CLASS
 
April 1,
2018

 
April 2,
2017

Sterile Injectable Pharmaceuticals (SIP)(f)
 
$
1,360

 
$
1,552

Sulperazon
 
Treatment of infections
 
168

 
122

Medrol
 
Steroid anti-inflammatory
 
120

 
120

Fragmin
 
Slows blood clotting
 
70

 
71

Tygacil
 
Tetracycline class antibiotic
 
63

 
74

Zosyn/Tazocin
 
Antibiotic
 
61

 
37

Precedex
 
Sedation agent in surgery or intensive care
 
55

 
64

All other SIP
 
Various
 
823

 
1,063

Peri-LOE Products(g)
 
 
 
$
737

 
$
822

Viagra EH(c)
 
Erectile dysfunction
 
187

 
89

Celebrex
 
Arthritis pain and inflammation, acute pain
 
145

 
175

Vfend
 
Fungal infections
 
98

 
107

Lyrica EH(b)
 
Epilepsy, neuropathic pain and generalized anxiety disorder
 
82

 
141

Zyvox
 
Bacterial infections
 
68

 
77

Revatio
 
Pulmonary arterial hypertension
 
56

 
65

Pristiq
 
Depression
 
53

 
116

All other Peri-LOE Products
 
Various
 
49

 
53

Biosimilars(h)
 
Various
 
$
173

 
$
105

Inflectra/Remsima
 
Inflammatory diseases
 
145

 
78

All other Biosimilars
 
Various
 
29

 
27

Pfizer CentreOne(i)
 
 
 
$
171

 
$
182

Hospira Infusion Systems (HIS)(j)
 
Various
 
$
—

 
$
97

Total Lyrica(b)
 
Epilepsy, post-herpetic neuralgia and diabetic peripheral neuropathy, fibromyalgia, neuropathic pain due to spinal cord injury
 
$
1,213

 
$
1,271

Total Viagra(c)
 
Erectile dysfunction
 
$
187

 
$
339

Total Alliance revenues
 
Various
 
$
855

 
$
656


(a) 
The IH business encompasses Internal Medicine, Vaccines, Oncology, Inflammation & Immunology, Rare Disease and Consumer Healthcare.
(b) 
Lyrica revenues from all of Europe, Russia, Turkey, Israel and Central Asia countries are included in Lyrica EH. All other Lyrica revenues are included in Lyrica IH. Total Lyrica revenues represent the aggregate of worldwide revenues from Lyrica IH and Lyrica EH.
(c) 
Viagra lost exclusivity in the U.S. in December 2017. Beginning in 2018, revenues for Viagra in the U.S. and Canada, which were reported in IH through 2017, are reported in EH (which reported all other Viagra revenues excluding the U.S. and Canada through 2017). Therefore, total Viagra revenues in 2018 are reported in EH. Total Viagra revenues in 2017 represent the aggregate of worldwide revenues from Viagra IH and Viagra EH.
(d) 
The EH business encompasses Legacy Established Products, Sterile Injectable Pharmaceuticals, Peri-LOE Products, Biosimilars, Pfizer CentreOne and HIS (through February 2, 2017).
(e) 
Legacy Established Products primarily include products that have lost patent protection (excluding Sterile Injectable Pharmaceuticals and Peri-LOE Products). In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
(f)  
Sterile Injectable Pharmaceuticals includes branded and generic injectables (excluding Peri-LOE Products). In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previous reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
(g) 
Peri-LOE Products includes products that have recently lost or are anticipated to soon lose patent protection. These products primarily include: Lyrica in Europe, Russia, Turkey, Israel and Central Asia; worldwide revenues for Celebrex, Pristiq, Zyvox, Vfend, Revatio and Inspra; and beginning in 2018, Viagra revenues for all countries (and Viagra revenues for all countries other than the U.S. and Canada in 2017, see note (c) above).
(h) 
Biosimilars includes Inflectra/Remsima (biosimilar infliximab) in the U.S. and certain international markets, Nivestim (biosimilar filgrastim) in certain European, Asian and Africa/Middle Eastern markets and Retacrit (biosimilar epoetin zeta) in certain European and Africa/Middle Eastern markets.
(i) 
Pfizer CentreOne includes revenues from our contract manufacturing and active pharmaceutical ingredient sales operation, including sterile injectables contract manufacturing, and revenues related to our manufacturing and supply agreements, including with Zoetis Inc. In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in first-quarter 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
(j) 
HIS (through February 2, 2017) includes Medication Management Systems products composed of infusion pumps and related software and services, as well as IV Infusion Products, including large volume IV solutions and their associated administration sets.
v3.8.0.1
Basis of Presentation and Significant Accounting Policies (Details)
$ in Millions
 3 Months Ended 12 Months Ended
Jan. 01, 2018
USD ($)
Accounting_standard
Apr. 01, 2018
USD ($)
Operating_Segment
Apr. 02, 2017
USD ($)
Dec. 31, 2017
USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]        
Number of business segments | Operating_Segment   2    
Number of accounting standards adopted | Accounting_standard 11      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Net unrealized gains on equity securities   $ 86    
Income [1]   178 $ (60)  
Net increase in cash and cash equivalents and restricted cash and cash equivalents [2]   985 1,465  
Accrued rebates and other accruals   5,392   $ 4,923
Financial Assets and Liabilities [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, pre-tax $ 462      
Cumulative effect adjustment to retained earnings, after-tax 419      
Net unrealized gains on equity securities [3]   111 $ 0  
Accounting for Hedging Activities [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Income   29    
Restricted Cash in the Statement of Cash Flows [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Net increase in cash and cash equivalents and restricted cash and cash equivalents   25    
Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Revenues [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, pre-tax 584      
Cumulative effect adjustment to retained earnings, after-tax 450      
Reclassification From Operating Activities To Financing Activities [Member] | Classification of Certain Transactions in the Statement of Cash Flows [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Debt prepayment and extinguishment costs   5    
Accreted interest   $ 24    
Collaboration Arrangements [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Revenues [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, pre-tax 500      
Collaboration Arrangements, Income From Upfront And Pre-Approval Milestone Payments [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Revenues [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, pre-tax 394      
Collaboration Arrangements, Product Manufacturing [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Revenues [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, pre-tax 82      
Product Rights And Out-Licensing Arrangements [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Revenues [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, pre-tax 394      
Product Shipments [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Revenues [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, pre-tax 84      
Sales Revenue, Product Line [Member] | Product Concentration Risk [Member] | Top Nine Products [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Concentration risk, amount       $ 1,000
Concentration risk, percentage       46.00%
Retained Earnings [Member] | Income Tax Accounting [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, after-tax (189)      
Retained Earnings [Member] | Reclassification of Certain Tax Effects from AOCI [Member]        
New Accounting Pronouncements or Change in Accounting Principle [Line Items]        
Cumulative effect adjustment to retained earnings, after-tax $ 495      
[1] Amounts may not add due to rounding.
[2] Amounts may not add due to rounding.
[3] Represents the unrealized net gains on equity securities reflecting the adoption of a new accounting standard in the first quarter of 2018. Approximately $61 million of this unrealized gain relates to our investment in ICU Medical stock, which is held by an international entity and therefore valued as of February 23, 2018, the international quarter end. Prior to the adoption of the new standard, net unrealized gains and losses on virtually all readily tradeable equity securities were reported in Accumulated other comprehensive income. For additional information, see Note 1B and Note 7B.
v3.8.0.1
Basis of Presentation and Significant Accounting Policies - Impact of Adoption of Pension and Postretirement Benefit Costs Accounting Standard (Details) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Cost of sales [1],[2] $ 2,563 $ 2,468
Selling, informational and administrative expenses [1],[2] 3,412 3,315
Research and development expenses [1],[2] 1,743 1,716
Restructuring charges and certain acquisition-related costs [1] 43 84
Other (income)/deductions––net [1] (178) 60
Income from continuing operations before provision for taxes on income [1],[3] $ 4,127 3,951
As Previously Reported [Member]    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Cost of sales   2,470
Selling, informational and administrative expenses   3,308
Research and development expenses   1,708
Restructuring charges and certain acquisition-related costs   157
Other (income)/deductions––net   (1)
Income from continuing operations before provision for taxes on income   3,951
Accounting Standards Update 2017-07 [Member] | Effect of Change Higher/(Lower) [Member]    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Cost of sales   (3)
Selling, informational and administrative expenses   7
Research and development expenses   8
Restructuring charges and certain acquisition-related costs   (74)
Other (income)/deductions––net   62
Income from continuing operations before provision for taxes on income   $ 0
[1] Amounts may not add due to rounding.
[2] Excludes amortization of intangible assets, except as disclosed in Note 9A. Identifiable Intangible Assets and Goodwill: Identifiable Intangible Assets.
[3] Income from continuing operations before provision for taxes on income. IH’s earnings in the first quarter of 2018 and 2017 include dividend income of $59 million and $43 million, respectively, from our investment in ViiV. For additional information, see Note 4.
v3.8.0.1
Basis of Presentation and Significant Accounting Policies - Impact of Adoption of Accounting Standards on Consolidated Balance Sheet (Details) - USD ($)
$ in Millions
Apr. 01, 2018
 [1]
Jan. 01, 2018
Dec. 31, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Trade accounts receivable $ 9,452 $ 8,234 $ 8,221 [1]
Inventories 8,148 [2] 7,567 7,578 [1],[2]
Current tax assets 3,624 3,036 3,050 [1]
Noncurrent deferred tax assets and other noncurrent tax assets 1,883 1,838 1,855 [1]
Other noncurrent assets 2,896 3,023 3,227 [1]
Other current liabilities 10,950 10,992 11,115 [1]
Noncurrent deferred tax liabilities 5,967 3,988 3,900 [1]
Other noncurrent liabilities 5,644 5,690 6,149 [1]
Retained earnings 89,961 86,466 85,291 [1]
Accumulated other comprehensive loss $ (9,402) $ (10,235) (9,321) [1]
As Previously Reported [Member]      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Trade accounts receivable     8,221
Inventories     7,578
Current tax assets     3,050
Noncurrent deferred tax assets and other noncurrent tax assets     1,855
Other noncurrent assets     3,227
Other current liabilities     11,115
Noncurrent deferred tax liabilities     3,900
Other noncurrent liabilities     6,149
Retained earnings     85,291
Accumulated other comprehensive loss     (9,321)
Revenues [Member] | Effect of Change Higher/(Lower) [Member]      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Trade accounts receivable     13
Inventories     (11)
Current tax assets     (11)
Noncurrent deferred tax assets and other noncurrent tax assets     (17)
Other noncurrent assets     0
Other current liabilities     (123)
Noncurrent deferred tax liabilities     106
Other noncurrent liabilities     (459)
Retained earnings     450
Accumulated other comprehensive loss     0
Financial Assets and Liabilities [Member] | Effect of Change Higher/(Lower) [Member]      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Trade accounts receivable     0
Inventories     0
Current tax assets     0
Noncurrent deferred tax assets and other noncurrent tax assets     0
Other noncurrent assets     0
Other current liabilities     0
Noncurrent deferred tax liabilities     0
Other noncurrent liabilities     0
Retained earnings     419
Accumulated other comprehensive loss     (419)
Income Tax Accounting [Member] | Effect of Change Higher/(Lower) [Member]      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Trade accounts receivable     0
Inventories     0
Current tax assets     (3)
Noncurrent deferred tax assets and other noncurrent tax assets     0
Other noncurrent assets     (204)
Other current liabilities     0
Noncurrent deferred tax liabilities     (18)
Other noncurrent liabilities     0
Retained earnings     (189)
Accumulated other comprehensive loss     0
Reclassification of Certain Tax Effects from AOCI [Member] | Effect of Change Higher/(Lower) [Member]      
New Accounting Pronouncements or Change in Accounting Principle [Line Items]      
Trade accounts receivable     0
Inventories     0
Current tax assets     0
Noncurrent deferred tax assets and other noncurrent tax assets     0
Other noncurrent assets     0
Other current liabilities     0
Noncurrent deferred tax liabilities     0
Other noncurrent liabilities     0
Retained earnings     495
Accumulated other comprehensive loss     $ (495)
[1] Amounts may not add due to rounding.
[2] The change from December 31, 2017 reflects increases for certain products to meet targeted levels in the normal course of business, including supply recovery and inventory build for new product launches, as well as an increase due to foreign exchange.
v3.8.0.1
Basis of Presentation and Significant Accounting Policies - Impact of Adoption of Accounting Standards Related to Classification of Certain Transactions in the Statement of Cash Flows (Details) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Operating Activities    
Other adjustments, net [1] $ (164) $ (225)
Other changes in assets and liabilities, net of acquisitions and divestitures [1] (2,715) (2,217)
Investing Activities    
Proceeds from redemptions/sales of short-term investments [1] 6,463 2,232
Proceeds from redemptions/sales of long-term investments [1] 576 844
Financing Activities    
Principal payments on short-term borrowings [1] (2,493) (2,519)
Net proceeds from/(payments on) short-term borrowings with original maturities of three months or less [1] (83) (2,110)
Net increase in cash and cash equivalents and restricted cash and cash equivalents [1] 985 1,465
Cash and cash equivalents, and restricted cash and cash equivalents, beginning [1] 1,431 2,666
Cash and cash equivalents and restricted cash and cash equivalents, end [1] 2,416 4,131
As Previously Reported [Member]    
Operating Activities    
Other adjustments, net   (211)
Other changes in assets and liabilities, net of acquisitions and divestitures   (2,225)
Investing Activities    
Proceeds from redemptions/sales of short-term investments   2,235
Proceeds from redemptions/sales of long-term investments   846
Financing Activities    
Principal payments on short-term borrowings   (2,530)
Net proceeds from/(payments on) short-term borrowings with original maturities of three months or less   (2,113)
Net increase in cash and cash equivalents and restricted cash and cash equivalents   1,461
Cash and cash equivalents, and restricted cash and cash equivalents, beginning   2,595
Cash and cash equivalents and restricted cash and cash equivalents, end   4,057
Cash Flow Classification [Member] | Effect of Change Higher/(Lower) [Member]    
Operating Activities    
Other adjustments, net   (14)
Financing Activities    
Principal payments on short-term borrowings   11
Net proceeds from/(payments on) short-term borrowings with original maturities of three months or less   3
Restricted Cash [Member]    
Financing Activities    
Net increase in cash and cash equivalents and restricted cash and cash equivalents $ 25  
Restricted Cash [Member] | Effect of Change Higher/(Lower) [Member]    
Operating Activities    
Other changes in assets and liabilities, net of acquisitions and divestitures   8
Investing Activities    
Proceeds from redemptions/sales of short-term investments   (3)
Proceeds from redemptions/sales of long-term investments   (2)
Financing Activities    
Net increase in cash and cash equivalents and restricted cash and cash equivalents   4
Cash and cash equivalents, and restricted cash and cash equivalents, beginning   70
Cash and cash equivalents and restricted cash and cash equivalents, end   $ 74
[1] Amounts may not add due to rounding.
v3.8.0.1
Basis of Presentation and Significant Accounting Policies - Accrued Rebates and Other Accruals (Details) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Schedule Of Accrued Liabilities [Line Items]    
Accrued rebates and other accruals $ 5,392 $ 4,923
Trade accounts receivable, less allowance for doubtful accounts [Member]    
Schedule Of Accrued Liabilities [Line Items]    
Accrued rebates and other accruals 1,363 1,352
Other current liabilities [Member]    
Schedule Of Accrued Liabilities [Line Items]    
Accrued rebates 2,932 2,674
Other accruals 725 512
Other noncurrent liabilities [Member]    
Schedule Of Accrued Liabilities [Line Items]    
Accrued rebates and other accruals $ 372 $ 385
v3.8.0.1
Acquisition, Sale of Hospira Infusion Systems Net Assets, Licensing Arrangement and Collaborative Arrangements - AstraZeneca (Details) - USD ($)
$ in Millions
 3 Months Ended
Dec. 22, 2016
Apr. 01, 2018
Jul. 02, 2017
Dec. 31, 2017
Business Acquisition [Line Items]        
Goodwill [1]   $ 56,393   $ 55,952
AstraZeneca [Member]        
Business Acquisition [Line Items]        
Initial payment $ 552      
Additional payment made for a purchase price adjustment     $ 3  
Milestone payment   $ 125 $ 50  
Deferred payment 175      
Maximum amount of potential milestone payments 75      
Maximum amount of potential sales-related payments $ 600      
Term of royalty payments 10 years      
Consideration transferred in business acquisition $ 1,040      
Payments for acquisitions, cash portion 555      
Contingent consideration assumed 485      
Identifiable intangible assets 894      
Other current assets 92      
Goodwill 73      
Deferred tax liabilities 19      
In Process Research and Development [Member] | AstraZeneca [Member]        
Business Acquisition [Line Items]        
Identifiable intangible assets 166      
Developed Technology Rights [Member] | AstraZeneca [Member]        
Business Acquisition [Line Items]        
Identifiable intangible assets 728      
Minimum [Member] | AstraZeneca [Member]        
Business Acquisition [Line Items]        
Undiscounted royalty payments 250      
Maximum [Member] | AstraZeneca [Member]        
Business Acquisition [Line Items]        
Undiscounted royalty payments $ 430      
[1] Amounts may not add due to rounding.
v3.8.0.1
Acquisition, Sale of Hospira Infusion Systems Net Assets, Licensing Arrangement and Collaborative Arrangements - Sale of Hospira Infusion Systems Net Assets to ICU Medical, Inc. (EH) (Details) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended
Feb. 03, 2017
Apr. 01, 2018
Apr. 02, 2017
Jan. 05, 2017
Oct. 06, 2016
Business Acquisition [Line Items]          
Gain (loss) on sale of HIS net assets [1],[2]   $ (3) $ (37)    
HIS [Member] | Disposed of by Sale [Member] | ICU Medical [Member]          
Business Acquisition [Line Items]          
Consideration transferred       $ 900 $ 1,000
Number of shares received in disposition 3.2        
Value of shares received from disposition $ 428        
Promissory note 75        
Cash received from disposition     200    
Contingent consideration $ 225        
Ownership percentage   16.00%      
Minimum share transfer restriction term 18 months        
Gain (loss) on sale of HIS net assets   $ (3) $ (37)    
Administrative service period 24 months        
Maximum manufacturing service period 5 years        
[1] Amounts may not add due to rounding.
[2] In the first quarter of 2018 and 2017, represents an incremental charge to amounts previously recorded in 2016 to write down the HIS net assets to fair value less costs to sell related to the sale of HIS net assets to ICU Medical on February 3, 2017. For additional information, see Note 2B.
v3.8.0.1
Acquisition, Sale of Hospira Infusion Systems Net Assets, Licensing Arrangement and Collaborative Arrangements - Licensing Arrangement (Details) - Shire [Member] - Licensing Arrangement [Member] - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Apr. 01, 2018
Dec. 31, 2016
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]    
Maximum amount of possible development and sales-based milestone payments and potential future royalty payments   $ 460
Other (Income)/Deductions, Net [Member]    
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]    
Upfront payments received $ 75 $ 90
v3.8.0.1
Acquisition, Sale of Hospira Infusion Systems Net Assets, Licensing Arrangement and Collaborative Arrangements - Collaboration Arrangement (Details) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Jan. 01, 2018
Apr. 01, 2018
Apr. 02, 2017
Dec. 31, 2013
Dec. 31, 2017
Merck [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Collaborator's revenue and expense ownership percentage   60.00%      
Company's revenue and expense ownership percentage   40.00%      
Eli Lilly & Company [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Deferred milestone revenue recognized   $ 52      
Other (Income)/Deductions, Net [Member] | Merck [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Upfront payments received   40 $ 90    
Milestone payment receivable   40     $ 60
Deferred milestone revenue recognized   90      
Other Noncurrent Liabilities [Member] | Merck [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Deferred milestone payment         60
Other Noncurrent Liabilities [Member] | Eli Lilly & Company [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Deferred milestone revenue recognized   19      
Other Current Liabilities [Member] | Eli Lilly & Company [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Deferred milestone revenue recognized   33      
Deferred Revenue [Member] | Eli Lilly & Company [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Upfront payments received       $ 200  
Revenues [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Cumulative effect adjustment to retained earnings, pre-tax $ 584        
Revenues [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Other (Income)/Deductions, Net [Member] | Merck [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Deferred milestone revenue recognized   85      
Revenues [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Other Noncurrent Liabilities [Member] | Merck [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Deferred milestone payment         $ 60
Revenues [Member] | Difference between Revenue Guidance in Effect before and after Topic 606 [Member] | Deferred Revenue [Member] | Eli Lilly & Company [Member] | Collaborative Arrangement [Member]          
Collaborative Arrangements and Non-collaborative Arrangement Transactions [Line Items]          
Deferred milestone revenue recognized   $ 107      
v3.8.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives (Detail) - USD ($)
$ in Millions
 3 Months Ended 36 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Sep. 03, 2018
Restructuring Cost and Reserve [Line Items]      
Integration costs [1] $ 52 $ 77  
Restructuring charges:      
Employee terminations (8) (30)  
Asset impairments 2 24  
Exit costs (3) 2  
Restructuring credits [2] (9) (5)  
Transaction costs [3] 0 12  
Integration costs [1] 52 77  
Restructuring charges and certain acquisition-related costs [4] 43 84  
Implementation costs recorded in our condensed consolidated statements of income as follows:      
Implementation costs [5] 39 31  
Total costs associated with acquisitions and cost-reduction/productivity initiatives 131 202  
Other (Income)/Deductions, Net [Member]      
Restructuring charges:      
Net periodic pension and postretirement benefit costs recorded in Other (income)/deductions––net [6] 32 74  
Cost of Sales [Member]      
Restructuring charges:      
Additional depreciation––asset restructuring recorded in Cost of sales: [7] 17 14  
Implementation costs recorded in our condensed consolidated statements of income as follows:      
Implementation costs [5] 16 15  
Selling, Informational and Administrative Expenses [Member]      
Implementation costs recorded in our condensed consolidated statements of income as follows:      
Implementation costs [5] 17 9  
Research and Development Expense [Member]      
Implementation costs recorded in our condensed consolidated statements of income as follows:      
Implementation costs [5] 6 $ 7  
Enterprise-wide Cost Reduction/Productivity Plan [Member]      
Restructuring Cost and Reserve [Line Items]      
Restructuring cost incurred associated with the return of acquired in-process research and development rights 83    
Expected restructuring cost $ 1,100    
Percentage of expected costs to be non-cash 20.00%    
Manufacturing Plant Network Optimization [Member] | Enterprise-wide Cost Reduction/Productivity Plan [Member]      
Restructuring Cost and Reserve [Line Items]      
Expected restructuring cost $ 800    
Restructuring costs incurred 237    
Centralization of Corporate and Platform Functions [Member] | Enterprise-wide Cost Reduction/Productivity Plan [Member]      
Restructuring Cost and Reserve [Line Items]      
Expected restructuring cost 300    
Restructuring costs incurred 195    
Business Integration Costs [Member]      
Restructuring Cost and Reserve [Line Items]      
Restructuring cost incurred associated with the return of acquired in-process research and development rights $ 21    
Hospira [Member]      
Restructuring Cost and Reserve [Line Items]      
Expected integration related costs, period 3 years    
Hospira [Member] | Return of Acquired Rights [Member]      
Restructuring Cost and Reserve [Line Items]      
Restructuring cost incurred associated with the return of acquired in-process research and development rights $ 215    
Hospira [Member] | Business Integration Costs [Member]      
Restructuring Cost and Reserve [Line Items]      
Restructuring cost incurred associated with the return of acquired in-process research and development rights $ 27    
Forecast [Member] | Hospira [Member]      
Restructuring Cost and Reserve [Line Items]      
Integration costs     $ 1,000
Restructuring charges:      
Integration costs     $ 1,000
[1] Integration costs represent external, incremental costs directly related to integrating acquired businesses, and primarily include expenditures for consulting and the integration of systems and processes. In the first quarters of 2018 and 2017, integration costs primarily relate to our acquisition of Hospira.
[2] In the three months ended April 1, 2018, restructuring credits are primarily associated with our acquisition of Hospira, as well as cost-reduction and productivity initiatives not associated with acquisitions. In the three months ended April 2, 2017, restructuring credits are largely associated with cost-reduction and productivity initiatives not associated with acquisitions, partially offset by charges related to our acquisitions of Medivation and Anacor. In the three months ended April 1, 2018, Employee terminations primarily include revisions of our estimates of severance benefits. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, many of which may be paid out during periods after termination.The restructuring activities for the three months ended April 1, 2018 are associated with the following:•EH ($14 million income); WRD/GPD ($2 million income); manufacturing operations ($2 million); and Corporate ($4 million).The restructuring activities for the three months ended April 2, 2017 are associated with the following:•IH ($7 million); EH ($18 million income); WRD/GPD ($13 million income); manufacturing operations ($17 million); and Corporate ($2 million).
[3] Transaction costs represent external costs for banking, legal, accounting and other similar services, virtually all of which in the first quarter of 2017 were directly related to our acquisition of Medivation.
[4] Amounts may not add due to rounding.
[5] Implementation costs represent external, incremental costs directly related to implementing our non-acquisition-related cost-reduction/productivity initiatives.
[6] In the three months ended April 1, 2018, represents the net pension curtailments and settlements other than service costs reclassified from employee terminations and integration costs to Other (income)/deductions––net upon the adoption of a new accounting standard in the first quarter of 2018. In the three months ended April 2, 2017, composed of (i) $48 million, representing the net pension curtailments and settlements other than service costs reclassified to Other (income)/deductions––net upon the retrospective adoption of a new accounting standard in the first quarter of 2018 and (ii) $25 million, representing the net periodic benefit costs, excluding service costs, reclassified to Other (income)/deductions––net as a result of the retrospective adoption of a new accounting standard in the first quarter of 2018. These costs represent accelerated amortization of actuarial losses and prior service costs upon the settlement of the remaining obligation associated with the Hospira U.S. qualified defined benefit pension plan. For additional information, see Note 1B.
[7] Additional depreciation––asset restructuring represents the impact of changes in the estimated useful lives of assets involved in restructuring actions.
v3.8.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives - Footnotes (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Restructuring Cost and Reserve [Line Items]    
Provision/(credit) [1] $ (9) $ (5)
Net periodic benefit costs/(credits) other than service costs [2] (82) 62
Corporate [Member]    
Restructuring Cost and Reserve [Line Items]    
Provision/(credit) 4 2
IH [Member] | Operating Segments [Member]    
Restructuring Cost and Reserve [Line Items]    
Provision/(credit)   7
EH [Member] | Operating Segments [Member]    
Restructuring Cost and Reserve [Line Items]    
Provision/(credit) (14) (18)
WRD & GPD [Member] | Segment Reconciling Items [Member]    
Restructuring Cost and Reserve [Line Items]    
Provision/(credit) (2) (13)
Manufacturing operations [Member] | Segment Reconciling Items [Member]    
Restructuring Cost and Reserve [Line Items]    
Provision/(credit) $ 2 17
Other (Income)/Deductions, Net [Member] | Accounting Standards Update 2017-07 [Member]    
Restructuring Cost and Reserve [Line Items]    
Reclassification of net pension curtailments and settlements other than service costs   48
Net periodic benefit costs/(credits) other than service costs   $ 25
[1] In the three months ended April 1, 2018, restructuring credits are primarily associated with our acquisition of Hospira, as well as cost-reduction and productivity initiatives not associated with acquisitions. In the three months ended April 2, 2017, restructuring credits are largely associated with cost-reduction and productivity initiatives not associated with acquisitions, partially offset by charges related to our acquisitions of Medivation and Anacor. In the three months ended April 1, 2018, Employee terminations primarily include revisions of our estimates of severance benefits. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, many of which may be paid out during periods after termination.The restructuring activities for the three months ended April 1, 2018 are associated with the following:•EH ($14 million income); WRD/GPD ($2 million income); manufacturing operations ($2 million); and Corporate ($4 million).The restructuring activities for the three months ended April 2, 2017 are associated with the following:•IH ($7 million); EH ($18 million income); WRD/GPD ($13 million income); manufacturing operations ($17 million); and Corporate ($2 million).
[2] Represents the net periodic benefit costs/(credits), excluding service costs, as a result of the adoption of a new accounting standard in the first quarter of 2018. Effective January 1, 2018, the U.S. Pfizer Consolidated Pension Plan was frozen to future benefit accruals and for the first quarter of 2018, resulted in the recognition of lower net periodic benefit costs due to the extension of the amortization period for the actuarial losses and the elimination of service costs. There was also a greater than expected gain on plan assets due to a higher plan asset base compared to the first quarter of 2017. For additional information, see Note 1B and Note 10.
v3.8.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives - Restructuring Accruals (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Restructuring Reserve [Roll Forward]    
Balance, December 31, 2017 [1] $ 1,105  
Provision/(credit) [2] (9) $ (5)
Utilization and other [3] (100)  
Balance, April 1, 2018 [4] 995  
Employee Termination Costs [Member]    
Restructuring Reserve [Roll Forward]    
Balance, December 31, 2017 [1] 1,039  
Provision/(credit) (8)  
Utilization and other [3] (85)  
Balance, April 1, 2018 [4] 946  
Asset Impairment Charges [Member]    
Restructuring Reserve [Roll Forward]    
Balance, December 31, 2017 [1] 0  
Provision/(credit) 2  
Utilization and other [3] (2)  
Balance, April 1, 2018 [4] 0  
Exit Costs [Member]    
Restructuring Reserve [Roll Forward]    
Balance, December 31, 2017 [1] 66  
Provision/(credit) (3)  
Utilization and other [3] (14)  
Balance, April 1, 2018 [4] $ 49  
[1] Included in Other current liabilities ($643 million) and Other noncurrent liabilities ($462 million).
[2] In the three months ended April 1, 2018, restructuring credits are primarily associated with our acquisition of Hospira, as well as cost-reduction and productivity initiatives not associated with acquisitions. In the three months ended April 2, 2017, restructuring credits are largely associated with cost-reduction and productivity initiatives not associated with acquisitions, partially offset by charges related to our acquisitions of Medivation and Anacor. In the three months ended April 1, 2018, Employee terminations primarily include revisions of our estimates of severance benefits. Employee termination costs are generally recorded when the actions are probable and estimable and include accrued severance benefits, many of which may be paid out during periods after termination.The restructuring activities for the three months ended April 1, 2018 are associated with the following:•EH ($14 million income); WRD/GPD ($2 million income); manufacturing operations ($2 million); and Corporate ($4 million).The restructuring activities for the three months ended April 2, 2017 are associated with the following:•IH ($7 million); EH ($18 million income); WRD/GPD ($13 million income); manufacturing operations ($17 million); and Corporate ($2 million).
[3] Includes adjustments for foreign currency translation.
[4] Included in Other current liabilities ($565 million) and Other noncurrent liabilities ($431 million).
v3.8.0.1
Restructuring Charges and Other Costs Associated with Acquisitions and Cost-Reduction/Productivity Initiatives - Restructuring Accruals - Footnotes (Detail) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Restructuring Cost and Reserve [Line Items]    
Restructuring reserve $ 995 [1] $ 1,105 [2]
Other Current Liabilities [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring reserve 565 643
Other Noncurrent Liabilities [Member]    
Restructuring Cost and Reserve [Line Items]    
Restructuring reserve $ 431 $ 462
[1] Included in Other current liabilities ($565 million) and Other noncurrent liabilities ($431 million).
[2] Included in Other current liabilities ($643 million) and Other noncurrent liabilities ($462 million).
v3.8.0.1
Other (Income)/Deductions - Net (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Interest income $ (77) $ (81)
Interest expense 310 309
Net interest expense 233 228
Royalty-related income (96) (86)
Net gains on asset disposals [1] (19) (90)
Income from collaborations, out-licensing arrangements and sales of compound/product rights [2] (142) (47)
Net unrealized gains on equity securities (86)  
Net periodic benefit costs/(credits) other than service costs [3] (82) 62
Certain legal matters, net (19) 8
Certain asset impairments 0 12
Loss on sale of HIS net assets [4],[5] 3 37
Business and legal entity alignment costs [6] 3 21
Other, net [7] 51 (84)
Other (income)/deductions––net [8] (178) 60
Financial Assets and Liabilities [Member]    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Net unrealized gains on equity securities [9] $ (111) $ 0
[1] In the first quarter of 2018, primarily includes net gains on sales of investments in equity and debt securities (approximately $12 million). In the first quarter of 2017, primarily includes net gains on sales of investments in equity and debt securities (approximately $42 million) and a gain on sale of property (approximately $48 million).
[2] Includes income from upfront and milestone payments from our collaboration partners and income from out-licensing arrangements and sales of compound/product rights. In the first quarter of 2018, primarily includes, among other things, a $75 million milestone payment received from Shire related to their first dosing of a patient in a Phase III clinical trial of a compound out-licensed by Pfizer to Shire for the treatment of ulcerative colitis, and a $40 million milestone payment from Merck in conjunction with the approval of ertugliflozin in the EU. For additional information, see Note 2C and Note 2D.
[3] Represents the net periodic benefit costs/(credits), excluding service costs, as a result of the adoption of a new accounting standard in the first quarter of 2018. Effective January 1, 2018, the U.S. Pfizer Consolidated Pension Plan was frozen to future benefit accruals and for the first quarter of 2018, resulted in the recognition of lower net periodic benefit costs due to the extension of the amortization period for the actuarial losses and the elimination of service costs. There was also a greater than expected gain on plan assets due to a higher plan asset base compared to the first quarter of 2017. For additional information, see Note 1B and Note 10.
[4] Amounts may not add due to rounding.
[5] In the first quarter of 2018 and 2017, represents an incremental charge to amounts previously recorded in 2016 to write down the HIS net assets to fair value less costs to sell related to the sale of HIS net assets to ICU Medical on February 3, 2017. For additional information, see Note 2B.
[6] In the first quarter of 2018 and 2017, represents expenses for changes to our infrastructure to align our commercial operations, including costs to internally separate our businesses into distinct legal entities, as well as to streamline our intercompany supply operations to better support each business.
[7] In the first quarter of 2018, primarily includes, among other things, charges of $102 million, reflecting the change in the fair value of contingent consideration, partially offset by dividend income of $59 million from our investment in ViiV. In the first quarter of 2017, primarily includes, among other things, dividend income of $43 million from our investment in ViiV.
[8] Amounts may not add due to rounding.
[9] Represents the unrealized net gains on equity securities reflecting the adoption of a new accounting standard in the first quarter of 2018. Approximately $61 million of this unrealized gain relates to our investment in ICU Medical stock, which is held by an international entity and therefore valued as of February 23, 2018, the international quarter end. Prior to the adoption of the new standard, net unrealized gains and losses on virtually all readily tradeable equity securities were reported in Accumulated other comprehensive income. For additional information, see Note 1B and Note 7B.
v3.8.0.1
Other (Income)/Deductions - Net (Footnotes) (Detail) - USD ($)
$ in Millions
 3 Months Ended 12 Months Ended
Feb. 23, 2018
Apr. 01, 2018
Apr. 02, 2017
Dec. 31, 2016
Loss Contingencies [Line Items]        
Gain on sale of investments   $ 12 $ 42  
Gain on sale of property     48  
Unrealized gain   86    
ViiV Healthcare Limited [Member]        
Loss Contingencies [Line Items]        
Change in fair value of contingent consideration   102    
Operating Segments [Member] | IH [Member] | ViiV Healthcare Limited [Member]        
Loss Contingencies [Line Items]        
Dividend income   59 43  
Other (Income)/Deductions, Net [Member] | Shire [Member] | Licensing Arrangement [Member]        
Loss Contingencies [Line Items]        
Milestone payment received   75   $ 90
Other (Income)/Deductions, Net [Member] | Merck [Member] | Collaborative Arrangement [Member]        
Loss Contingencies [Line Items]        
Milestone payment received   $ 40 $ 90  
Disposed of by Sale [Member] | HIS [Member] | ICU Medical [Member]        
Loss Contingencies [Line Items]        
Unrealized gain $ 61      
v3.8.0.1
Tax Matters - Narrative (Detail) - USD ($)
$ in Billions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Dec. 31, 2017
Income Tax Disclosure [Abstract]      
Repatriation tax liability     $ 15.2
Provisional deferred tax liability     $ 1.0
Effective tax rate for income from continuing operations 13.50% 20.80%  
v3.8.0.1
Tax Matters (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Foreign currency translation adjustments, net [1] $ (34) $ (21)
Unrealized holding losses on derivative financial instruments, net (4) 3
Reclassification adjustments for (gains)/losses included in net income (7) (52)
Derivatives qualifying as hedges, tax, total (9) (49)
Unrealized holding gains on available-for-sale securities, net 20 38
Reclassification adjustments for (gains)/losses included in net income (22) 11
Available-for-sale securities, tax, total (47) 48
Benefit plans: actuarial gains, net 38 0
Reclassification adjustments related to amortization 14 50
Reclassification adjustments related to settlements, net 9 12
Other (20) 5
Defined benefit plans, actuarial gain (loss), tax, total 677 66
Benefit plans: prior service (costs)/credits and other, net 0 0
Reclassification adjustments related to amortization (11) (17)
Reclassification adjustments related to curtailments, net (7) (3)
Other 6 0
Pension and other postretirement benefit plans, net prior service cost (credit), tax (155) (19)
Tax provision on other comprehensive (loss)/income [2] 432 25
ASU 2018-02 [Member]    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Reclassification adjustments of certain tax effects from AOCI to Retained earnings [3] 1 0
Reclassification adjustments of certain tax effects from AOCI to Retained earnings [3] 637 0
Reclassification adjustments of certain tax effects from AOCI to Retained earnings [3] (144) 0
ASU 2016-01 [Member]    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Reclassification adjustments for tax on unrealized gains from AOCI to Retained earnings [4] $ (45) $ 0
[1] Taxes are not provided for foreign currency translation adjustments relating to investments in international subsidiaries that will be held indefinitely.
[2] Amounts may not add due to rounding.
[3] For additional information on the adoption of a new accounting standard related to reclassification of certain tax effects from AOCI, see Note 1B.
[4] For additional information on the adoption of a new accounting standard related to financial assets and liabilities, see Note 1B.
v3.8.0.1
Accumulated Other Comprehensive Loss, Excluding Noncontrolling Interests (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Dec. 31, 2017
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance, December 31, 2017 [1] $ 71,308  
Balance, April 1, 2018 [1] 70,184  
Foreign currency translation adjustments attributable to noncontrolling interests 1  
Accumulated Other Comprehensive Income (Loss) [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance, December 31, 2017 (9,321)  
Other comprehensive income/(loss) due to the adoption of new accounting standards [2]   $ (913)
Other comprehensive income/(loss) [3] 832  
Balance, April 1, 2018 (9,402)  
Foreign Currency Translation Adjustment [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance, December 31, 2017 (5,180)  
Other comprehensive income/(loss) [3] 808  
Balance, April 1, 2018 (4,375)  
Derivative Financial Instruments [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance, December 31, 2017 (30)  
Other comprehensive income/(loss) [3] (59)  
Balance, April 1, 2018 (90)  
Cash flow hedge loss to be reclassified within twelve months 222  
Available-For-Sale Securities [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance, December 31, 2017 401  
Other comprehensive income/(loss) [3] (12)  
Balance, April 1, 2018 (28)  
Actuarial Gains/(Losses) [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance, December 31, 2017 (5,262)  
Other comprehensive income/(loss) [3] 135  
Balance, April 1, 2018 (5,764)  
Prior Service (Costs)/Credits and Other [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Balance, December 31, 2017 750  
Other comprehensive income/(loss) [3] (39)  
Balance, April 1, 2018 $ 855  
ASU 2018-02 [Member] | Derivative Financial Instruments [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Other comprehensive income/(loss) due to the adoption of new accounting standards [2]   (1)
ASU 2018-02 [Member] | Actuarial Gains/(Losses) [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Other comprehensive income/(loss) due to the adoption of new accounting standards [2]   (637)
ASU 2018-02 [Member] | Prior Service (Costs)/Credits and Other [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Other comprehensive income/(loss) due to the adoption of new accounting standards [2]   144
ASU 2016-01 [Member] | Foreign Currency Translation Adjustment [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Other comprehensive income/(loss) due to the adoption of new accounting standards [2]   (2)
ASU 2016-01 [Member] | Available-For-Sale Securities [Member]    
AOCI Attributable to Parent, Net of Tax [Roll Forward]    
Other comprehensive income/(loss) due to the adoption of new accounting standards [2]   $ (416)
[1] Amounts may not add due to rounding.
[2] Amounts represent the cumulative effect adjustments as of January 1, 2018 from the adoption of new accounting standards related to (i) financial assets and liabilities and (ii) the reclassification of certain tax effects from AOCI. For additional information, see Note 1B.
[3] Amounts do not include foreign currency translation adjustments attributable to noncontrolling interests of $1 million income for the first three months of 2018.
v3.8.0.1
Financial Instruments - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis (Detail) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities $ 1,085 $ 2,150
Total assets [1] 164,612 171,797
Total liabilities 1,003 691
Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 15,188 24,937
Total liabilities 1,003 691
Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 1,085 2,150
Available-for-sale debt securities 7,006 15,362
Total short-term investments 8,091 17,512
Other Current Assets [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 289 337
Other Current Assets [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 93 104
Other Current Assets [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 196 234
Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities [2] 1,497 1,440
Available-for-sale debt securities 4,833 5,090
Trading securities, debt 60 73
Trading funds and securities 1,557 1,514
Total long-term investments 6,390 6,603
Other Noncurrent Assets [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 418 484
Other Noncurrent Assets [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 325 477
Other Noncurrent Assets [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 92 7
Other Current Liabilities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 389 201
Other Current Liabilities [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 2 1
Other Current Liabilities [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 387 201
Other Noncurrent Liabilities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 614 490
Other Noncurrent Liabilities [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 424 177
Other Noncurrent Liabilities [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 190 313
Level 1 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 1,590 1,523
Total liabilities 0 0
Level 1 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 20 16
Available-for-sale debt securities 0 0
Total short-term investments 20 16
Level 1 [Member] | Other Current Assets [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 0 0
Level 1 [Member] | Other Current Assets [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 0 0
Level 1 [Member] | Other Current Assets [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 0 0
Level 1 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities [2] 1,465 1,398
Available-for-sale debt securities 46 36
Trading securities, debt 60 73
Trading funds and securities 1,525 1,472
Total long-term investments 1,571 1,507
Level 1 [Member] | Other Noncurrent Assets [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 0 0
Level 1 [Member] | Other Noncurrent Assets [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 0 0
Level 1 [Member] | Other Noncurrent Assets [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 0 0
Level 1 [Member] | Other Current Liabilities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 0 0
Level 1 [Member] | Other Current Liabilities [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 0 0
Level 1 [Member] | Other Current Liabilities [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 0 0
Level 1 [Member] | Other Noncurrent Liabilities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 0 0
Level 1 [Member] | Other Noncurrent Liabilities [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 0 0
Level 1 [Member] | Other Noncurrent Liabilities [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 0 0
Level 2 [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Total assets 13,597 23,414
Total liabilities 1,003 691
Level 2 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 1,065 2,134
Available-for-sale debt securities 7,006 15,362
Total short-term investments 8,071 17,496
Level 2 [Member] | Other Current Assets [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 289 337
Level 2 [Member] | Other Current Assets [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 93 104
Level 2 [Member] | Other Current Assets [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative assets 196 234
Level 2 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities [2] 32 42
Available-for-sale debt securities 4,787 5,054
Trading securities, debt 0 0
Trading funds and securities 32 42
Total long-term investments 4,819 5,096
Level 2 [Member] | Other Noncurrent Assets [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 418 484
Level 2 [Member] | Other Noncurrent Assets [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 325 477
Level 2 [Member] | Other Noncurrent Assets [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative assets 92 7
Level 2 [Member] | Other Current Liabilities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 389 201
Level 2 [Member] | Other Current Liabilities [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 2 1
Level 2 [Member] | Other Current Liabilities [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Current derivative liabilities 387 201
Level 2 [Member] | Other Noncurrent Liabilities [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 614 490
Level 2 [Member] | Other Noncurrent Liabilities [Member] | Recurring [Member] | Interest rate contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 424 177
Level 2 [Member] | Other Noncurrent Liabilities [Member] | Recurring [Member] | Foreign exchange contracts [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Noncurrent derivative liabilities 190 313
Money market funds [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 1,054 2,115
Money market funds [Member] | Level 1 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 0 0
Money market funds [Member] | Level 2 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities 1,054 2,115
Equity [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities [2] 31 35
Equity [Member] | Level 1 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities [2] 20 16
Equity [Member] | Level 2 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Equity securities [2] 11 19
Government and agency - non U.S. [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 3,617 12,629
Government and agency - non U.S. [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 3,370 12,242
Government and agency - non U.S. [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 247 387
Government and agency - non U.S. [Member] | Level 1 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 0
Government and agency - non U.S. [Member] | Level 1 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 0
Government and agency - non U.S. [Member] | Level 2 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 3,370 12,242
Government and agency - non U.S. [Member] | Level 2 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 247 387
Corporate [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities [3] 7,685 6,938
Corporate [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 3,581 2,766
Corporate [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 4,103 4,172
Corporate [Member] | Level 1 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 0
Corporate [Member] | Level 1 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 46 36
Corporate [Member] | Level 2 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 3,581 2,766
Corporate [Member] | Level 2 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 4,058 4,136
Government - U.S. [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 466 747
Government - U.S. [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 252
Government - U.S. [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 465 495
Government - U.S. [Member] | Level 1 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 0
Government - U.S. [Member] | Level 1 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 0
Government - U.S. [Member] | Level 2 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 252
Government - U.S. [Member] | Level 2 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 465 495
Agency asset-backed - U.S. [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 22 24
Agency asset-backed - U.S. [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 22 23
Agency asset-backed - U.S. [Member] | Level 1 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 0
Agency asset-backed - U.S. [Member] | Level 2 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 22 23
Other asset-backed [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities [4] 50 114
Other asset-backed [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 33 79
Other asset-backed [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 17 35
Other asset-backed [Member] | Level 1 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 0
Other asset-backed [Member] | Level 1 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 0 0
Other asset-backed [Member] | Level 2 [Member] | Short-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities 33 79
Other asset-backed [Member] | Level 2 [Member] | Long-term Investments [Member] | Recurring [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Available-for-sale debt securities $ 17 $ 35
[1] Amounts may not add due to rounding.
[2] As of April 1, 2018 and December 31, 2017, equity securities of $31 million and $42 million, respectively, are held in trust for benefits attributable to the former Pharmacia Savings Plus Plan.
[3] Issued by a diverse group of corporations.
[4] Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.
v3.8.0.1
Financial Instruments - Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis - Footnotes (Detail) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Recurring [Member]    
Footnotes to selected financial assets and liabilities:    
Equity securities, held in trust $ 31 $ 42
v3.8.0.1
Financial Instruments - Financial Assets and Liabilities Not Measured at Fair Value on a Recurring Basis (Details) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Carrying Value [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Long-term debt, excluding the current portion $ 31,831 $ 33,538
Estimated Fair Value [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Long-term debt, excluding the current portion 33,303 37,253
Estimated Fair Value [Member] | Level 2 [Member]    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Long-term debt, excluding the current portion $ 33,303 $ 37,253
v3.8.0.1
Financial Instruments - Total Short-Term and Long-Term Investments (Details) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Financial Instruments [Abstract]    
Equity securities $ 1,085 $ 2,150
Available-for-sale debt securities 7,006 15,362
Held-to-maturity debt securities 1,028 1,138
Total Short-term investments [1] 9,119 18,650
Equity securities 1,557 1,514
Available-for-sale debt securities 4,833 5,090
Held-to-maturity debt securities 78 4
Private equity investments carried at equity-method or cost 477 408
Total Long-term investments [1] 6,945 7,015
Held-to-maturity cash equivalents $ 876 $ 719
[1] Amounts may not add due to rounding.
v3.8.0.1
Financial Instruments - Investments (Details) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Held-to-maturity Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]    
Debt securities, amortized cost $ 13,852 $ 22,337
Debt securities, gross unrealized gains 108 77
Debt securities, gross unrealized losses (139) (100)
Available-for-sale securities and held-to-maturity securities 13,821 22,313
Debt securities maturities, within 1 year, fair value 8,910  
Debt securities maturities, over 1 to 5 years, fair value 3,472  
Debt securities maturities, over 5 years, fair value 1,439  
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]    
Available-for-sale equity securities, amortized cost [1]   2,843
Available-for-sale equity securities, gross unrealized gain [1]   586
Available-for-sale equity securities, gross unrealized losses [1]   (124)
Available-for-sale securities, equity securities [1]   3,304
Government and agency - non U.S. [Member]    
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]    
Available-for-sale debt securities, amortized cost 3,536 12,616
Available-for-sale debt securities, gross unrealized gains 102 61
Available-for-sale debt securities, gross unrealized losses (21) (48)
Available-for-sale debt securities, fair value 3,617 12,629
Available-for-sale Securities, Debt Maturities [Abstract]    
Available-for-sale securities, debt maturities, within 1 year, fair value 3,370  
Available-for-sale securities, debt maturities, over 1 to 5 years, fair value 247  
Available-for-sale securities, debt maturities, over 5 years, fair value 0  
Available-for-sale debt securities, fair value 3,617 12,629
Held-to-maturity Securities, Debt Maturities [Abstract]    
Held-to-maturity securities, debt maturities, total 404 770
Held-to-maturity securities, gross unrealized gains 0 0
Held-to-maturity securities, gross unrealized losses 0 0
Held-to-maturity securities, fair value 404 770
Held-to-maturity Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]    
Held-to-maturity securities, debt maturities, within 1 year, fair value 404  
Held-to-maturity securities, debt maturities, over 1 to 5 years, fair value 0  
Held-to-maturity securities, debt maturities, over 5 years, fair value 0  
Held-to-maturity securities, debt maturities, total 404 770
Corporate [Member]    
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]    
Available-for-sale debt securities, amortized cost [2] 7,771 6,955
Available-for-sale debt securities, gross unrealized gains [2] 6 15
Available-for-sale debt securities, gross unrealized losses [2] (93) (33)
Available-for-sale debt securities, fair value [2] 7,685 6,938
Available-for-sale Securities, Debt Maturities [Abstract]    
Available-for-sale securities, debt maturities, within 1 year, fair value [2] 3,581  
Available-for-sale securities, debt maturities, over 1 to 5 years, fair value [2] 2,674  
Available-for-sale securities, debt maturities, over 5 years, fair value [2] 1,430  
Available-for-sale debt securities, fair value [2] 7,685 6,938
Government - U.S. [Member]    
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]    
Available-for-sale debt securities, amortized cost 490 765
Available-for-sale debt securities, gross unrealized gains 0 0
Available-for-sale debt securities, gross unrealized losses (25) (19)
Available-for-sale debt securities, fair value 466 747
Available-for-sale Securities, Debt Maturities [Abstract]    
Available-for-sale securities, debt maturities, within 1 year, fair value 0  
Available-for-sale securities, debt maturities, over 1 to 5 years, fair value 462  
Available-for-sale securities, debt maturities, over 5 years, fair value 3  
Available-for-sale debt securities, fair value 466 747
Agency asset-backed - U.S. [Member]    
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]    
Available-for-sale debt securities, amortized cost 23 24
Available-for-sale debt securities, gross unrealized gains 0 0
Available-for-sale debt securities, gross unrealized losses (1) (1)
Available-for-sale debt securities, fair value 22 24
Available-for-sale Securities, Debt Maturities [Abstract]    
Available-for-sale securities, debt maturities, within 1 year, fair value 22  
Available-for-sale securities, debt maturities, over 1 to 5 years, fair value 0  
Available-for-sale securities, debt maturities, over 5 years, fair value 0  
Available-for-sale debt securities, fair value 22 24
Other asset-backed [Member]    
Available-for-sale Debt Securities, Amortized Cost Basis [Abstract]    
Available-for-sale debt securities, amortized cost [3] 50 114
Available-for-sale debt securities, gross unrealized gains [3] 0 0
Available-for-sale debt securities, gross unrealized losses [3] 0 0
Available-for-sale debt securities, fair value [3] 50 114
Available-for-sale Securities, Debt Maturities [Abstract]    
Available-for-sale securities, debt maturities, within 1 year, fair value [3] 33  
Available-for-sale securities, debt maturities, over 1 to 5 years, fair value [3] 15  
Available-for-sale securities, debt maturities, over 5 years, fair value [3] 2  
Available-for-sale debt securities, fair value [3] 50 114
Time deposits and other [Member]    
Held-to-maturity Securities, Debt Maturities [Abstract]    
Held-to-maturity securities, debt maturities, total 1,578 1,091
Held-to-maturity securities, gross unrealized gains 0 0
Held-to-maturity securities, gross unrealized losses 0 0
Held-to-maturity securities, fair value 1,578 1,091
Held-to-maturity Securities, Debt Maturities, Fair Value, Fiscal Year Maturity [Abstract]    
Held-to-maturity securities, debt maturities, within 1 year, fair value 1,500  
Held-to-maturity securities, debt maturities, over 1 to 5 years, fair value 74  
Held-to-maturity securities, debt maturities, over 5 years, fair value 4  
Held-to-maturity securities, debt maturities, total $ 1,578 1,091
Money market funds [Member]    
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]    
Available-for-sale equity securities, amortized cost [1]   2,115
Available-for-sale equity securities, gross unrealized gain [1]   0
Available-for-sale equity securities, gross unrealized losses [1]   0
Available-for-sale securities, equity securities [1]   2,115
Equity [Member]    
Available-for-sale Equity Securities, Amortized Cost Basis [Abstract]    
Available-for-sale equity securities, amortized cost [1]   728
Available-for-sale equity securities, gross unrealized gain [1]   586
Available-for-sale equity securities, gross unrealized losses [1]   (124)
Available-for-sale securities, equity securities [1]   $ 1,190
[1] Upon the 2018 adoption of a new accounting standard related to financial assets and liabilities, available-for-sale equity securities were classified as equity securities. For additional information see Note 1B.The following table presents the unrealized gains and losses for the period that relates to equity securities still held at the reporting date:(MILLIONS OF DOLLARS) April 1, 2018Net gains recognized during the period on equity securities(a) $98Less: Net losses recognized during the period on equity securities sold during the period (12)Unrealized gains during the reporting period on equity securities still held at the reporting date 86
[2] Issued by a diverse group of corporations.
[3] Includes loan-backed, receivable-backed and mortgage-backed securities, all of which are in senior positions in the capital structure of the security. Loan-backed securities are collateralized by senior secured obligations of a diverse pool of companies or student loans and receivable-backed securities are collateralized by credit cards receivables. Mortgage-backed securities are collateralized by diversified pools of residential and commercial mortgages.
v3.8.0.1
Financial Instruments - Investments - Unrealized Gains and Losses Related to Equity Securities (Details) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Net gains recognized during the period on equity securities [1] $ 98  
Less: Net losses recognized during the period on equity securities sold during the period (12)  
Unrealized gains during the reporting period on equity securities still held at the reporting date 86  
Financial Assets and Liabilities [Member]    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Unrealized gains during the reporting period on equity securities still held at the reporting date [2] 111 $ 0
Equity Securities [Member]    
New Accounting Pronouncements or Change in Accounting Principle [Line Items]    
Unrealized loss on securities $ 13  
[1] Includes $111 million of unrealized net gains reflecting the adoption of a new accounting standard in the first quarter of 2018 (see Note 1B and Note 4), and $13 million of unrealized loss on other equity securities.
[2] Represents the unrealized net gains on equity securities reflecting the adoption of a new accounting standard in the first quarter of 2018. Approximately $61 million of this unrealized gain relates to our investment in ICU Medical stock, which is held by an international entity and therefore valued as of February 23, 2018, the international quarter end. Prior to the adoption of the new standard, net unrealized gains and losses on virtually all readily tradeable equity securities were reported in Accumulated other comprehensive income. For additional information, see Note 1B and Note 7B.
v3.8.0.1
Financial Instruments - Short-term Borrowings (Details) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Financial Instruments [Abstract]    
Commercial paper $ 4,000 $ 6,100
Current portion of long-term debt, principal amount 4,752 3,532
Other short-term borrowings, principal amount [1] 257 320
Total short-term borrowings, principal amount 9,009 9,951
Net fair value adjustments related to hedging and purchase accounting 10 14
Net unamortized discounts, premiums and debt issuance costs (8) (12)
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted [2] $ 9,010 $ 9,953
[1] Other short-term borrowings primarily include cash collateral. For additional information, see Note 7F.
[2] Amounts may not add due to rounding.
v3.8.0.1
Financial Instruments - Long-Term Debt (Details) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Debt Instrument [Line Items]    
Net fair value adjustments related to hedging and purchase accounting $ 10 $ 14
Net unamortized discounts, premiums and debt issuance costs (8) (12)
Total long-term debt, carried at historical proceeds, as adjusted [1] 31,831 33,538
Current portion of long-term debt, carried at historical proceeds [1] 4,763 3,546
Unsecured Debt [Member]    
Debt Instrument [Line Items]    
Total long-term debt, principal amount 31,484 32,783
Net fair value adjustments related to hedging and purchase accounting 461 872
Net unamortized discounts, premiums and debt issuance costs (122) (125)
Other long-term debt 8 8
Total long-term debt, carried at historical proceeds, as adjusted 31,831 33,538
Current portion of long-term debt, carried at historical proceeds $ 4,763 $ 3,546
[1] Amounts may not add due to rounding.
v3.8.0.1
Financial Instruments - Other Noncurrent Liabilities (Detail) - USD ($)
$ in Millions
 1 Months Ended
Dec. 31, 2017
Aug. 31, 2017
Jun. 30, 2017
Apr. 01, 2018
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net $ 36,562     $ 35,537
Developed Technology Rights [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net 34,765     33,726
Bosulif [Member]        
Finite-Lived Intangible Assets [Line Items]        
Aggregate amount of guaranteed fixed annual payments to be made in connection with research and development arrangement $ 416      
U.S. [Member] | Bosulif [Member]        
Finite-Lived Intangible Assets [Line Items]        
Term over which fixed annual payments are to be made 10 years      
U.S. [Member] | Bosulif [Member] | Developed Technology Rights [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       364
U.S. [Member] | Bosulif [Member] | Developed Technology Rights [Member] | Other Noncurrent Liabilities [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       253
U.S. [Member] | Bosulif [Member] | Developed Technology Rights [Member] | Other Current Liabilities [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       30
U.S. [Member] | Besponsa [Member]        
Finite-Lived Intangible Assets [Line Items]        
Aggregate amount of guaranteed fixed annual payments to be made in connection with research and development arrangement   $ 296    
Term over which fixed annual payments are to be made   9 years    
U.S. [Member] | Besponsa [Member] | Developed Technology Rights [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       248
U.S. [Member] | Besponsa [Member] | Developed Technology Rights [Member] | Other Noncurrent Liabilities [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       230
U.S. [Member] | Besponsa [Member] | Developed Technology Rights [Member] | Other Current Liabilities [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       7
EU [Member] | Besponsa [Member]        
Finite-Lived Intangible Assets [Line Items]        
Aggregate amount of guaranteed fixed annual payments to be made in connection with research and development arrangement     $ 148  
Term over which fixed annual payments are to be made     9 years  
EU [Member] | Besponsa [Member] | Developed Technology Rights [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       123
EU [Member] | Besponsa [Member] | Developed Technology Rights [Member] | Other Noncurrent Liabilities [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       116
EU [Member] | Besponsa [Member] | Developed Technology Rights [Member] | Other Current Liabilities [Member]        
Finite-Lived Intangible Assets [Line Items]        
Finite-lived intangible assets, net       $ 3
v3.8.0.1
Financial Instruments - Fair Value of Derivative Financial Instruments and Related Notional Amounts (Details) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Derivative [Line Items]    
Asset $ 707 $ 822
Liability 1,003 691
Designated as Hedging Instrument [Member]    
Derivative [Line Items]    
Asset 676 760
Liability 868 637
Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Notional [1] 18,777 18,723
Asset [1] 258 179
Liability [1] 442 459
Designated as Hedging Instrument [Member] | Interest rate contracts [Member]    
Derivative [Line Items]    
Notional 12,430 12,430
Asset 418 581
Liability 426 178
Not Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Notional 14,510 14,300
Asset 31 62
Liability 134 $ 54
Inventory sales [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Notional [1] $ 5,000  
[1] As of April 1, 2018, the notional amount of outstanding foreign currency forward-exchange contracts hedging our intercompany forecasted inventory sales was $5.0 billion.
v3.8.0.1
Financial Instruments - Derivative Financial Instruments and Hedging Activities (Details) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
OID [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2] $ (55) $ (143)
Not Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2] (55) (140)
Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2],[3] 0 (3)
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach [1],[2] 0 0
Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2] (7) 3
Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Interest rate contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2] (399) (92)
Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Interest rate contracts, hedged item gain/(loss) [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2] 399 92
Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts, hedged item gain (loss) [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2] 8 (3)
Net Investment Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2] 0 0
The portion of gains/(losses) on foreign exchange contracts excluded from the assessment of hedge effectiveness [1],[2] 0 0
Net Investment Hedging, Nonderivative Instruments [Member] | OID [Member] | Foreign currency short-term borrowings [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2],[4] 0 0
Net Investment Hedging, Nonderivative Instruments [Member] | OID [Member] | Foreign currency Long-term debt [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2],[4] 0 0
Other Derivative Instruments [Member] | OID [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OID [1],[2] 0 0
Amount of Gains/(Losses) Recognized in OCI [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[5] (251) (66)
Amount of Gains/(Losses) Recognized in OCI [Member] | Not Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[5] 0 0
Amount of Gains/(Losses) Recognized in OCI [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach [2],[5] 28 0
Amount of Gains/(Losses) Recognized in OCI [2],[3],[5] (143) (9)
Amount of Gains/(Losses) Recognized in OCI [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[5] 0 0
Amount of Gains/(Losses) Recognized in OCI [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Interest rate contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[5] 0 0
Amount of Gains/(Losses) Recognized in OCI [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Interest rate contracts, hedged item gain/(loss) [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[5] 0 0
Amount of Gains/(Losses) Recognized in OCI [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts, hedged item gain (loss) [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[5] 0 0
Amount of Gains/(Losses) Recognized in OCI [Member] | Net Investment Hedging [Member] | Designated as Hedging Instrument [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
The portion of gains/(losses) on foreign exchange contracts excluded from the assessment of hedge effectiveness [2],[5] 2 0
Amount of Gains/(Losses) Recognized in OCI [2],[5] (5) 0
Amount of Gains/(Losses) Recognized in OCI [Member] | Net Investment Hedging, Nonderivative Instruments [Member] | Foreign currency short-term borrowings [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[4],[5] (42) 0
Amount of Gains/(Losses) Recognized in OCI [Member] | Net Investment Hedging, Nonderivative Instruments [Member] | Foreign currency Long-term debt [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[4],[5] (92) (57)
Amount of Gains/(Losses) Recognized in OCI [Member] | Other Derivative Instruments [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Recognized in OCI [2],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | OID [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[5] (39) 242
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Not Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount excluded from effectiveness testing recognized in earnings based on an amortization approach [2],[5] 27 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[3],[5] (72) 242
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Interest rate contracts [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Interest rate contracts, hedged item gain/(loss) [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts, hedged item gain (loss) [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Net Investment Hedging [Member] | Designated as Hedging Instrument [Member] | OID [Member] | Foreign exchange contracts [Member]    
Derivative [Line Items]    
The portion of gains/(losses) on foreign exchange contracts excluded from the assessment of hedge effectiveness [2],[5] 6 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Net Investment Hedging, Nonderivative Instruments [Member] | OID [Member] | Foreign currency short-term borrowings [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[4],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Net Investment Hedging, Nonderivative Instruments [Member] | OID [Member] | Foreign currency Long-term debt [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[4],[5] 0 0
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [Member] | Other Derivative Instruments [Member] | OID [Member]    
Derivative [Line Items]    
Amount of Gains/(Losses) Reclassified from OCI into OID and COS [2],[5] $ 0 $ 0
[1] For the three months ended April 2, 2017, there was no significant ineffectiveness.
[2] OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income.
[3] Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax loss of $156 million within the next 12 months into Cost of sales. The maximum length of time over which we are hedging future foreign exchange cash flow relates to our $1.9 billion U.K. pound debt maturing in 2043.
[4] Short-term borrowings include foreign currency short-term borrowings with carrying values of $1.5 billion as of April 1, 2018, which are used as hedging instruments in net investment hedges. Long-term debt includes foreign currency long-term borrowings with carrying values of $3.3 billion as of April 1, 2018, which are used as hedging instruments in net investment hedges.
[5] For derivative financial instruments in cash flow hedge relationships, the gains and losses are included in Other comprehensive (loss)/income––Unrealized holding losses on derivative financial instruments, net. For derivative financial instruments in net investment hedge relationships and for foreign currency debt designated as hedging instruments, the effective portion is included in Other comprehensive (loss)/income––Foreign currency translation adjustments, net.
v3.8.0.1
Financial Instruments - Derivative Financial Instruments and Hedging Activities - Footnotes (Details) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Derivative [Line Items]    
Pre-tax loss expected to be reclassified within the next 12 months $ 156  
Short-term debt [1] 9,010 $ 9,953
Unsecured Debt [Member]    
Derivative [Line Items]    
Long-term debt 1,900  
Foreign currency short-term borrowings [Member]    
Derivative [Line Items]    
Short-term debt 1,500  
Foreign currency Long-term debt [Member]    
Derivative [Line Items]    
Long-term debt $ 3,300  
[1] Amounts may not add due to rounding.
v3.8.0.1
Financial Instruments - Fair Value And Cash Flow Hedges (Details) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Financial Instruments [Abstract]    
Cost of sales [1],[2] $ 2,563 $ 2,468
Other (income)/deductions––net [1] $ (178) $ 60
[1] Amounts may not add due to rounding.
[2] Excludes amortization of intangible assets, except as disclosed in Note 9A. Identifiable Intangible Assets and Goodwill: Identifiable Intangible Assets.
v3.8.0.1
Financial Instruments - Cumulative Basis Adjustments for Fair Value Hedges (Details)
$ in Millions
Apr. 01, 2018
USD ($)
Short-term investments [Member]  
Derivative [Line Items]  
Carrying amount of hedged assets $ 286
Cumulative Amount of Fair Value Hedging Adjustment Gains/(Losses) Included in the Carrying Amount of the Hedged Assets (1)
Long-term investments [Member]  
Derivative [Line Items]  
Carrying amount of hedged assets 45
Cumulative Amount of Fair Value Hedging Adjustment Gains/(Losses) Included in the Carrying Amount of the Hedged Assets (1)
Short-term borrowings, including current portion of long-term debt [Member]  
Derivative [Line Items]  
Carrying amount of hedged liabilities 999
Cumulative Amount of Fair Value Hedging Adjustment Gains/(Losses) Included in the Carrying Amount of the Hedged Liabilities 1
Long-term debt [Member]  
Derivative [Line Items]  
Carrying amount of hedged liabilities 11,372
Cumulative Amount of Fair Value Hedging Adjustment Gains/(Losses) Included in the Carrying Amount of the Hedged Liabilities $ 100
v3.8.0.1
Financial Instruments - Narrative (Details)
$ in Millions
Apr. 01, 2018
USD ($)
Financial Instruments [Abstract]  
Derivatives in a net liability position $ 540
Collateral posted 596
Cash collateral received $ 145
v3.8.0.1
Financial Instruments - Credit Risk (Details)
$ in Millions
 3 Months Ended
Apr. 01, 2018
USD ($)
Bank sector [Member]  
Concentration Risk [Line Items]  
Maximum exposure, amount $ 1,200
Technology sector [Member]  
Concentration Risk [Line Items]  
Maximum exposure, amount 965
Energy sector [Member]  
Concentration Risk [Line Items]  
Maximum exposure, amount $ 758
v3.8.0.1
Inventories (Detail) - USD ($)
$ in Millions
Apr. 01, 2018
Jan. 01, 2018
Dec. 31, 2017
Inventory Disclosure [Abstract]      
Finished goods $ 2,838   $ 2,883
Work-in-process 4,485   3,908
Raw materials and supplies 825   788
Inventories 8,148 [1],[2] $ 7,567 7,578 [1],[2]
Noncurrent inventories not included above [3] $ 640   $ 683
[1] Amounts may not add due to rounding.
[2] The change from December 31, 2017 reflects increases for certain products to meet targeted levels in the normal course of business, including supply recovery and inventory build for new product launches, as well as an increase due to foreign exchange.
[3] Included in Other noncurrent assets. There are no recoverability issues associated with these amounts.
v3.8.0.1
Identifiable Intangible Assets and Goodwill - Finite-lived and Indefinite-lived Intangible Assets (Detail) - USD ($)
$ in Millions
Apr. 01, 2018
Dec. 31, 2017
Indefinite-lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets $ 12,153 $ 12,179
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, gross carrying amount 93,996 93,595
Finite-lived intangible assets, accumulated amortization [1] (58,458) (57,033)
Finite-lived Intangible Assets, less Accumulated Amortization 35,537 36,562
Intangible assets, gross carrying amount [1] 106,148 105,774
Finite-lived intangible assets, accumulated amortization [1] (58,458) (57,033)
Identifiable Intangible Assets, less Accumulated Amortization [1],[2] 47,690 48,741
Brands [Member]    
Indefinite-lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets 6,952 6,929
In Process Research and Development [Member]    
Indefinite-lived Intangible Assets [Line Items]    
Indefinite-lived intangible assets 5,201 5,249
Developed Technology Rights [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, gross carrying amount 89,877 89,550
Finite-lived intangible assets, accumulated amortization (56,152) (54,785)
Finite-lived Intangible Assets, less Accumulated Amortization 33,726 34,765
Finite-lived intangible assets, accumulated amortization (56,152) (54,785)
Brands [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, gross carrying amount 2,149 2,134
Finite-lived intangible assets, accumulated amortization (1,185) (1,152)
Finite-lived Intangible Assets, less Accumulated Amortization 964 982
Finite-lived intangible assets, accumulated amortization (1,185) (1,152)
License Agreements and Other [Member]    
Finite-Lived Intangible Assets [Line Items]    
Finite-lived intangible assets, gross carrying amount 1,969 1,911
Finite-lived intangible assets, accumulated amortization (1,122) (1,096)
Finite-lived Intangible Assets, less Accumulated Amortization 847 815
Finite-lived intangible assets, accumulated amortization $ (1,122) $ (1,096)
[1] The decrease in Identifiable intangible assets, less accumulated amortization, is primarily due to amortization, partially offset by an increase due to foreign exchange.Our identifiable intangible assets are associated with the following, as a percentage of total identifiable intangible assets, less accumulated amortization: April 1, 2018 IH EH WRDDeveloped technology rights 68% 32% —%Brands, finite-lived 75% 25% —%Brands, indefinite-lived 71% 29% —%IPR&D 82% 11% 7%
[2] Amounts may not add due to rounding.
v3.8.0.1
Identifiable Intangible Assets and Goodwill - Finite-lived Intangible Assets Percentage of Total Intangibles (Details)
Apr. 01, 2018
Operating Segments [Member] | Developed Technology Rights [Member] | IH [Member]  
Finite-Lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 68.00%
Operating Segments [Member] | Developed Technology Rights [Member] | EH [Member]  
Finite-Lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 32.00%
Operating Segments [Member] | Brands [Member] | IH [Member]  
Finite-Lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 75.00%
Operating Segments [Member] | Brands [Member] | EH [Member]  
Finite-Lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 25.00%
Pfizer's Worldwide Research and Development [Member] | Segment Reconciling Items [Member] | Developed Technology Rights [Member]  
Finite-Lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 0.00%
Pfizer's Worldwide Research and Development [Member] | Segment Reconciling Items [Member] | Brands [Member]  
Finite-Lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 0.00%
v3.8.0.1
Identifiable Intangible Assets and Goodwill - Indefinite-lived Intangible Assets Percentage of Total Intangibles (Details)
Apr. 01, 2018
IH [Member] | Operating Segments [Member] | Brands [Member]  
Indefinite-lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 71.00%
IH [Member] | Operating Segments [Member] | In Process Research and Development [Member]  
Indefinite-lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 82.00%
EH [Member] | Operating Segments [Member] | Brands [Member]  
Indefinite-lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 29.00%
EH [Member] | Operating Segments [Member] | In Process Research and Development [Member]  
Indefinite-lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 11.00%
Pfizer's Worldwide Research and Development [Member] | Segment Reconciling Items [Member] | Brands [Member]  
Indefinite-lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 0.00%
Pfizer's Worldwide Research and Development [Member] | Segment Reconciling Items [Member] | In Process Research and Development [Member]  
Indefinite-lived Intangible Assets [Line Items]  
Percentage of total identifiable intangible assets, less accumulated amortization 7.00%
v3.8.0.1
Identifiable Intangible Assets and Goodwill - Narrative (Detail) - USD ($)
$ in Billions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Finite-Lived Intangible Assets [Member]    
Finite-Lived Intangible Assets [Line Items]    
Amortization expense for finite-lived intangible assets $ 1.2 $ 1.2
v3.8.0.1
Identifiable Intangible Assets and Goodwill - Goodwill (Detail)
$ in Millions
 3 Months Ended
Apr. 01, 2018
USD ($)
Goodwill [Roll Forward]  
Balance, December 31, 2017 $ 55,952 [1]
Other 441 [2]
Balance, April 1, 2018 56,393 [1]
IH [Member]  
Goodwill [Roll Forward]  
Balance, December 31, 2017 31,141
Other 213 [2]
Balance, April 1, 2018 31,355
EH [Member]  
Goodwill [Roll Forward]  
Balance, December 31, 2017 24,811
Other 228 [2]
Balance, April 1, 2018 $ 25,039
[1] Amounts may not add due to rounding.
[2] Primarily reflects the impact of foreign exchange.
v3.8.0.1
Pension and Postretirement Benefit Plans - Net Periodic Benefit Cost (Detail)
$ in Millions
 3 Months Ended
Apr. 01, 2018
USD ($)
Apr. 02, 2017
USD ($)
Jan. 01, 2018
pension_plan
Amortization of:      
Number of pension plans frozen | pension_plan     2
Pension Plan [Member] | U.S. [Member] | Qualified [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Service cost [1],[2] $ 0 $ 68  
Interest cost [2] 151 162  
Expected return on plan assets [2] (263) (259)  
Amortization of:      
Actuarial losses [1] 30 115  
Prior service costs (credits) [2] 0 2  
Curtailments [2] 2 5  
Settlements [2] 20 31  
Defined benefit plan, net periodic benefit cost [2] (58) 124  
Pension Plan [Member] | International [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Service cost [1],[2] 37 41  
Interest cost [2] 54 50  
Expected return on plan assets [2] (92) (84)  
Amortization of:      
Actuarial losses [1] 26 28  
Prior service costs (credits) [2] (1) (1)  
Curtailments [2] 0 0  
Settlements [2] 0 1  
Defined benefit plan, net periodic benefit cost [2] 24 35  
Supplemental Employee Retirement Plan [Member] | U.S. [Member] | Non-Qualified [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Service cost [1],[2] 0 6  
Interest cost [2] 13 14  
Expected return on plan assets [2] 0 0  
Amortization of:      
Actuarial losses [1] 4 13  
Prior service costs (credits) [2] 0 0  
Curtailments [2] 0 0  
Settlements [2] 17 21  
Defined benefit plan, net periodic benefit cost [2] 33 53  
Postretirement Plans [Member]      
Defined Benefit Plan Disclosure [Line Items]      
Service cost [1],[2] 10 11  
Interest cost [2] 18 23  
Expected return on plan assets [2] (9) (9)  
Amortization of:      
Actuarial losses [1] 2 8  
Prior service costs (credits) [2] (45) (46)  
Curtailments [2] (7) (7)  
Settlements [2] 0 0  
Defined benefit plan, net periodic benefit cost [2] $ (31) $ (21)  
[1] Effective January 1, 2018, we froze two significant defined benefit pension plans to future benefit accruals in the U.S. and U.K. and as a result, service costs for those plans are eliminated. In addition, due to the plan freeze, the average amortization period for the U.S. qualified plans and U.S. supplemental (non-qualified) plans was extended to the expected life expectancy of the plan participants, whereas the average amortization period in prior years utilized the expected future service period of plan participants.
[2] We adopted a new accounting standard on January 1, 2018 that requires the net periodic pension and postretirement benefit costs other than service costs be presented in Other (income)/deductions––net on the condensed consolidated statements of income. For additional information, see Note 1B and Note 4.
v3.8.0.1
Pension and Postretirement Benefit Plans (Detail) - USD ($)
$ in Millions
 1 Months Ended 3 Months Ended
Feb. 28, 2018
Apr. 01, 2018
Pension Plan [Member] | U.S. [Member] | Qualified [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Contributions from our general assets for the three months ended April 1, 2018 $ 500 $ 500
Expected contributions from our general assets during 2018 [1]   500
Pension Plan [Member] | International [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Contributions from our general assets for the three months ended April 1, 2018   37
Expected contributions from our general assets during 2018 [1]   229
Supplemental Employee Retirement Plan [Member] | U.S. [Member] | Non-Qualified [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Contributions from our general assets for the three months ended April 1, 2018   84
Expected contributions from our general assets during 2018 [1]   160
Postretirement Plans [Member]    
Defined Benefit Plan Disclosure [Line Items]    
Contributions from our general assets for the three months ended April 1, 2018   37
Expected contributions from our general assets during 2018 [1]   $ 163
[1] Contributions expected to be made for 2018 are inclusive of amounts contributed during the three months ended April 1, 2018, including the $500 million voluntary contribution that was made in February 2018 for the U.S. qualified plans, which was considered pre-funding for future anticipated mandatory contributions and is also expected to reduce Pension Benefit Guaranty Corporation variable rate premiums. The U.S. supplemental (non-qualified) pension plan, international pension plan and the postretirement plan contributions from our general assets include direct employer benefit payments.
v3.8.0.1
Earnings Per Common Share Attributable to Common Shareholders (Details) - USD ($)
shares in Millions, $ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
EPS Numerator––Basic    
Income from continuing operations [1] $ 3,571 $ 3,130
Less: Net income attributable to noncontrolling interests 9 9
Income from continuing operations attributable to Pfizer Inc. 3,562 3,121
Less: Preferred stock dividends––net of tax 0 0
Income from continuing operations attributable to Pfizer Inc. common shareholders 3,562 3,121
Discontinued operations––net of tax [1] (1) 0
Net income attributable to Pfizer Inc. common shareholders 3,560 3,121
EPS Numerator––Diluted    
Income from continuing operations attributable to Pfizer Inc. common shareholders and assumed conversions 3,562 3,121
Discontinued operations––net of tax, attributable to Pfizer Inc. common shareholders and assumed conversions (1) 0
Net income attributable to Pfizer Inc. common shareholders and assumed conversions $ 3,561 $ 3,121
EPS Denominator    
Weighted-average number of common shares outstanding––Basic [1] 5,957 6,006
Common-share equivalents: stock options, stock issuable under employee compensation plans, convertible preferred stock and accelerated share repurchase agreements (shares) 100 86
Weighted-average number of common shares outstanding––Diluted [1] 6,057 6,092
Equity Option [Member]    
EPS Denominator    
Stock options that had exercise prices greater than the average market price of our common stock issuable under employee compensation plans (shares) [2] 2 48
[1] Amounts may not add due to rounding.
[2] These common stock equivalents were outstanding for the periods presented, but were not included in the computation of diluted EPS for those periods because their inclusion would have had an anti-dilutive effect.
v3.8.0.1
Contingencies and Certain Commitments (Actions In Which We Are The Plaintiff) (Details)
 1 Months Ended 3 Months Ended
Feb. 28, 2018
Patents
Jan. 31, 2018
Patents
Dec. 31, 2017
Patents
Oct. 31, 2017
Patents
Sep. 30, 2017
Patents
Jul. 31, 2017
Patents
Mar. 31, 2017
Patents
Feb. 28, 2017
Patents
Aug. 31, 2016
Patents
Jul. 31, 2016
Patents
Jan. 31, 2016
Patents
Dec. 31, 2015
Patents
Jun. 30, 2015
Patents
Apr. 30, 2017
Patents
Defendant
Precedex Premix [Member] | Hospira Versus Amneal Pharmaceuticals LLC [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents not infringed upon                         4  
Precedex Premix [Member] | Hospira Versus Amneal Pharmaceuticals LLC [Member] | Settled Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents not infringed upon   3                        
Number of patents infringed upon   1                        
Precedex Premix [Member] | Hospira Versus Fresenius [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents not infringed upon                       4    
Precedex Premix [Member] | Hospira Versus Par [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents not infringed upon                 4          
Precedex Premix [Member] | Hospira Versus Gland [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon 4                          
Number of patents not infringed upon     6                      
Precedex Premix [Member] | Hospira Versus Hengrui [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon 4                          
Number of patents not infringed upon     6                      
Precedex Premix [Member] | Hospira Versus Baxter [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents not infringed upon 4                          
Number of patents due to expire in 2019 1                          
Number of patents due to expire in 2032 3                          
Patent Infringement [Member] | Bosulif [Member] | Wyeth Versus Sun [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon         2                  
Patent Infringement [Member] | Xeljanz [Member] | Pfizer Versus MicroLabs [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon               3            
Patent Infringement [Member] | Xeljanz [Member] | Pfizer Versus Zydus [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon             3              
Patent Infringement [Member] | Xeljanz [Member] | Pfizer Versus Prinston and Breckenridge [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon             2              
Patent Infringement [Member] | Xeljanz [Member] | Pfizer Versus Breckenridge [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon       4                    
Number of patents due to expire in December 2020       3                    
Number or patents due to expire in December 2025       1                    
Patent Infringement [Member] | Toviaz [Member] | Pfizer Versus Mylan Laboratories Limited [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon                   5 5      
Patent Infringement [Member] | Toviaz [Member] | Pfizer Versus Mylan Laboratories Limited [Member] | Judicial Ruling [Member]                            
Gain Contingencies [Line Items]                            
Number of patents not infringed upon           5                
Patent Infringement [Member] | Toviaz Composition-of-matter Patents [Member] | Pfizer Versus Mylan Laboratories Limited [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents infringed upon                     3      
Patent Infringement [Member] | Eliquis [Member] | Pfizer and BMS Versus Several Generic Manufacturers [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon                           3
Number of defendants | Defendant                           25
Patent Infringement [Member] | Bavencio [Member] | Pfizer Versus BMS, E.R. Squibb & Sons, Ono Pharmaceutical and Tasuku Honjo [Member] | Pending Litigation [Member]                            
Gain Contingencies [Line Items]                            
Number of patents allegedly infringed upon           1                
v3.8.0.1
Contingencies and Certain Commitments (Actions In Which We Are The Defendant) (Detail)
£ in Millions, $ in Millions
 1 Months Ended
Nov. 30, 2017
USD ($)
Mar. 31, 2015
Patents
Mar. 31, 2013
lagoon
Apr. 01, 2018
Claim
Dec. 31, 2016
GBP (£)
Inflectra [Member] | Janssen and New York University Versus Hospira, Celltrion Healthcare and Celltrion Inc. [Member]          
Loss Contingencies [Line Items]          
Number of patents allegedly infringed upon   6      
Inflectra [Member] | Janssen and New York University Versus Hospira, Celltrion Healthcare and Celltrion Inc. [Member] | Settled Litigation [Member]          
Loss Contingencies [Line Items]          
Claims dismissed   4      
Inflectra [Member] | Janssen and New York University Versus Hospira, Celltrion Healthcare and Celltrion Inc. [Member] | Pending Litigation [Member]          
Loss Contingencies [Line Items]          
Number of patents allegedly infringed upon   2      
Celebrex [Member] | Pending Litigation [Member]          
Loss Contingencies [Line Items]          
Amount awarded to other party | $ $ 94        
Damages from Product Defects [Member] | Class Action Versus American Optical Corporation And Various Other Defendants [Member] | Pending Litigation [Member]          
Loss Contingencies [Line Items]          
Number of pending claims | Claim       56,680  
Average Wholesale Price [Member] | State of Illinois Versus Pfizer [Member] | Pending Litigation [Member]          
Loss Contingencies [Line Items]          
Number of pending claims | Claim       1  
Environmental Remediation Litigation [Member]          
Loss Contingencies [Line Items]          
Number of lagoons | lagoon     2    
Violation of Antitrust Laws [Member] | Phenytoin Sodium Capsules [Member]          
Loss Contingencies [Line Items]          
Imposed fine | £         £ 84.2
v3.8.0.1
Contingencies and Certain Commitments (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 1 Months Ended
Mar. 14, 2018
Mar. 12, 2018
Apr. 30, 2018
Apr. 01, 2018
Accelerated Share Repurchases [Line Items]        
Share repurchase agreement, amount   $ 4,000    
Accelerated share repurchases, cash paid $ 4,000      
Shares repurchased 87      
Shares repurchased, price per share (in dollars per share) $ 36.61      
Shares received in initial delivery, percentage of agreement amount   80.00%    
Remaining authorized repurchase amount       $ 10,300
Subsequent Event [Member] | Mylotarg [Member]        
Accelerated Share Repurchases [Line Items]        
Term over which additional fixed payments are to be made     10 years  
Research arrangement, fixed payment obligation     $ 301  
v3.8.0.1
Segment, Geographic and Other Revenue Information - Narrative (Detail)
$ in Millions
 3 Months Ended
Apr. 01, 2018
USD ($)
Operating_Segment
Apr. 02, 2017
USD ($)
Dec. 31, 2017
USD ($)
Segment Reporting Information [Line Items]      
Number of business segments | Operating_Segment 2    
Assets [1] $ 164,612   $ 171,797
Adjustment [Member] | Corporate [Member]      
Segment Reporting Information [Line Items]      
Costs   $ (9)  
Adjustment [Member] | IH [Member] | Operating Segments [Member]      
Segment Reporting Information [Line Items]      
Costs   (98)  
Adjustment [Member] | EH [Member] | Operating Segments [Member]      
Segment Reporting Information [Line Items]      
Costs   $ (33)  
[1] Amounts may not add due to rounding.
v3.8.0.1
Segment, Geographic and Other Revenue Information (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Segment Reporting Information [Line Items]    
Revenues [1] $ 12,906 $ 12,779
Earnings [1],[2] 4,127 3,951
Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Revenues 12,906 12,779
Earnings [2],[3] 7,719 7,787
Segment Reconciling Items [Member]    
Segment Reporting Information [Line Items]    
Earnings [2],[4],[5] (725) (688)
Segment Reconciling Items [Member] | Purchase Accounting Adjustments [Member]    
Segment Reporting Information [Line Items]    
Earnings [2],[4] (1,221) (1,172)
Segment Reconciling Items [Member] | Acquisition-Related Costs [Member]    
Segment Reporting Information [Line Items]    
Earnings [2],[4] (48) (124)
Segment Reconciling Items [Member] | Certain Significant Items [Member]    
Segment Reporting Information [Line Items]    
Earnings [2],[6] (201) (157)
Segment Reconciling Items [Member] | Other Unallocated [Member]    
Segment Reporting Information [Line Items]    
Earnings [2] (244) (359)
Corporate [Member]    
Segment Reporting Information [Line Items]    
Earnings [2],[3],[4] (1,153) (1,335)
IH [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Revenues 7,829 7,415
Earnings [2],[3] 4,930 4,747
EH [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Revenues 5,077 5,364
Earnings [2],[3] $ 2,788 $ 3,039
[1] Amounts may not add due to rounding.
[2] Income from continuing operations before provision for taxes on income. IH’s earnings in the first quarter of 2018 and 2017 include dividend income of $59 million and $43 million, respectively, from our investment in ViiV. For additional information, see Note 4.
[3] In connection with the StratCO reporting change, in the first quarter of 2017 we reclassified approximately $98 million of costs from IH, approximately $33 million of costs from EH and approximately $9 million of costs from Corporate to Other unallocated costs to conform to the current period presentation.
[4] For a description, see the “Other Costs and Business Activities” section above.
[5] Other business activities includes the costs managed by our WRD and GPD organizations.
[6] Certain significant items are substantive and/or unusual, and in some cases recurring, items (such as restructuring or legal charges) that, either as a result of their nature or size, would not be expected to occur as part of our normal business on a regular basis.For Earnings in the first quarter of 2018, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $51 million, (ii) income for certain legal matters of $19 million, (iii) an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $3 million, (iv) charges for business and legal entity alignment of $3 million and (v) other charges of $163 million, which primarily includes $108 million, in the aggregate, for a special one-time bonus paid to virtually all Pfizer colleagues, excluding executives, which was one of several actions taken by us after evaluating the expected positive net impact of the December 2017 enactment of the TCJA on us. For additional information, see Note 2B, Note 3, Note 4 and Note 5.For Earnings in the first quarter of 2017, certain significant items includes: (i) restructuring credits and implementation costs associated with our cost-reduction initiatives that are not associated with an acquisition of $30 million, (ii) charges for certain legal matters of $8 million, (iii) an incremental charge to amounts previously recorded to write down the HIS net assets to fair value less costs to sell of $37 million, (iv) charges for business and legal entity alignment of $21 million and (v) other charges of $61 million. For additional information, see Note 2B, Note 3 and Note 4.
v3.8.0.1
Segment, Geographic and Other Revenue Information - Footnotes (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Segment Reporting Information [Line Items]    
Income (charges) for certain legal matters $ 19 $ (8)
Gain (loss) on sale of HIS net assets [1],[2] (3) (37)
Business and legal entity alignment costs [3] 3 21
Segment Reconciling Items [Member]    
Segment Reporting Information [Line Items]    
Cost reduction and productivity initiatives excluding acquisition related costs 51 30
Income (charges) for certain legal matters 19 (8)
Business and legal entity alignment costs 3 21
Other charges 163 61
Special one-time bonus paid to all non-executive Pfizer colleagues 108  
HIS [Member] | Segment Reconciling Items [Member]    
Segment Reporting Information [Line Items]    
Gain (loss) on sale of HIS net assets 3 (37)
ViiV Healthcare Limited [Member] | IH [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Dividend income $ (59) (43)
Adjustment [Member] | Corporate [Member]    
Segment Reporting Information [Line Items]    
Costs and expenses   (9)
Adjustment [Member] | IH [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Costs and expenses   (98)
Adjustment [Member] | EH [Member] | Operating Segments [Member]    
Segment Reporting Information [Line Items]    
Costs and expenses   $ (33)
[1] Amounts may not add due to rounding.
[2] In the first quarter of 2018 and 2017, represents an incremental charge to amounts previously recorded in 2016 to write down the HIS net assets to fair value less costs to sell related to the sale of HIS net assets to ICU Medical on February 3, 2017. For additional information, see Note 2B.
[3] In the first quarter of 2018 and 2017, represents expenses for changes to our infrastructure to align our commercial operations, including costs to internally separate our businesses into distinct legal entities, as well as to streamline our intercompany supply operations to better support each business.
v3.8.0.1
Segment, Geographic and Other Revenue Information - Revenues By Geographic Area (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues [1] $ 12,906 $ 12,779
Percentage Change In Revenue 1.00%  
U.S. [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues $ 6,275 6,637
Percentage Change In Revenue (5.00%)  
Developed Europe [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues [2] $ 2,092 2,021
Percentage Change In Revenue [2] 4.00%  
Developed Rest Of World [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues [3] $ 1,461 1,554
Percentage Change In Revenue [3] (6.00%)  
Emerging Markets [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues [4] $ 3,078 $ 2,567
Percentage Change In Revenue [4] 20.00%  
[1] Amounts may not add due to rounding.
[2] Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland. Revenues denominated in euros were $1.7 billion and $1.6 billion in the first quarter of 2018 and 2017, respectively.
[3] Developed Rest of World region includes the following markets: Japan, Canada, Australia, South Korea and New Zealand.
[4] Emerging Markets region includes, but is not limited to, the following markets: Asia (excluding Japan and South Korea), Latin America, Eastern Europe, Africa, the Middle East, Central Europe and Turkey.
v3.8.0.1
Segment, Geographic and Other Revenue Information - Revenues By Geographic Area - Footnotes (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues [1] $ 12,906 $ 12,779
Developed Europe [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues [2] 2,092 2,021
Euro Member Countries, Euro [Member] | Developed Europe [Member]    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues $ 1,700 $ 1,600
[1] Amounts may not add due to rounding.
[2] Developed Europe region includes the following markets: Western Europe, Scandinavian countries and Finland. Revenues denominated in euros were $1.7 billion and $1.6 billion in the first quarter of 2018 and 2017, respectively.
v3.8.0.1
Segment, Geographic and Other Revenue Information - Revenues By Products (Detail) - USD ($)
$ in Millions
 3 Months Ended
Apr. 01, 2018
Apr. 02, 2017
Revenue from External Customer [Line Items]    
Revenues [1] $ 12,906 $ 12,779
Innovative Health and Essential Health [Member]    
Revenue from External Customer [Line Items]    
Revenues 12,906 12,779
Innovative Health and Essential Health [Member] | Lyrica [Member]    
Revenue from External Customer [Line Items]    
Revenues [2] 1,213 1,271
Innovative Health and Essential Health [Member] | Viagra [Member]    
Revenue from External Customer [Line Items]    
Revenues [3] 187 339
Innovative Health and Essential Health [Member] | Alliance revenues [Member]    
Revenue from External Customer [Line Items]    
Revenues 855 656
Innovative Health Business [Member] | IH [Member]    
Revenue from External Customer [Line Items]    
Revenues [4] 7,829 7,415
Essential Health Business [Member] | EH [Member]    
Revenue from External Customer [Line Items]    
Revenues [5] 5,077 5,364
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member]    
Revenue from External Customer [Line Items]    
Revenues [6] 2,636 2,606
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Lipitor [Member]    
Revenue from External Customer [Line Items]    
Revenues 511 404
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Norvasc [Member]    
Revenue from External Customer [Line Items]    
Revenues 254 228
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Premarin family [Member]    
Revenue from External Customer [Line Items]    
Revenues 191 228
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Zithromax [Member]    
Revenue from External Customer [Line Items]    
Revenues 90 79
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Zoloft [Member]    
Revenue from External Customer [Line Items]    
Revenues 74 68
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Xalatan/Xalacom [Member]    
Revenue from External Customer [Line Items]    
Revenues 72 77
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Effexor [Member]    
Revenue from External Customer [Line Items]    
Revenues 71 66
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Sildenafil Citrate [Member]    
Revenue from External Customer [Line Items]    
Revenues 62 0
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Xanax [Member]    
Revenue from External Customer [Line Items]    
Revenues 54 55
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | EpiPen [Member]    
Revenue from External Customer [Line Items]    
Revenues 52 81
Legacy Established Products (LEP) [Member] | Essential Health Business [Member] | EH [Member] | Other Legacy Established Products [Member]    
Revenue from External Customer [Line Items]    
Revenues 1,203 1,321
Sterile Injectable Pharmaceuticals [Member] | Essential Health Business [Member] | EH [Member]    
Revenue from External Customer [Line Items]    
Revenues [7] 1,360 1,552
Sterile Injectable Pharmaceuticals [Member] | Essential Health Business [Member] | EH [Member] | Sulperazon [Member]    
Revenue from External Customer [Line Items]    
Revenues 168 122
Sterile Injectable Pharmaceuticals [Member] | Essential Health Business [Member] | EH [Member] | Medrol [Member]    
Revenue from External Customer [Line Items]    
Revenues 120 120
Sterile Injectable Pharmaceuticals [Member] | Essential Health Business [Member] | EH [Member] | Fragmin [Member]    
Revenue from External Customer [Line Items]    
Revenues 70 71
Sterile Injectable Pharmaceuticals [Member] | Essential Health Business [Member] | EH [Member] | Tygacil [Member]    
Revenue from External Customer [Line Items]    
Revenues 63 74
Sterile Injectable Pharmaceuticals [Member] | Essential Health Business [Member] | EH [Member] | Tazosyn / Zosyn [Member]    
Revenue from External Customer [Line Items]    
Revenues 61 37
Sterile Injectable Pharmaceuticals [Member] | Essential Health Business [Member] | EH [Member] | Precedex [Member]    
Revenue from External Customer [Line Items]    
Revenues 55 64
Sterile Injectable Pharmaceuticals [Member] | Essential Health Business [Member] | EH [Member] | All Other Sterile Injectable Pharmaceuticals [Member]    
Revenue from External Customer [Line Items]    
Revenues 823 1,063
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member]    
Revenue from External Customer [Line Items]    
Revenues [8] 737 822
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member] | Lyrica [Member]    
Revenue from External Customer [Line Items]    
Revenues [2] 82 141
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member] | Viagra [Member]    
Revenue from External Customer [Line Items]    
Revenues [3] 187 89
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member] | Celebrex [Member]    
Revenue from External Customer [Line Items]    
Revenues 145 175
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member] | Vfend [Member]    
Revenue from External Customer [Line Items]    
Revenues 98 107
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member] | Zyvox [Member]    
Revenue from External Customer [Line Items]    
Revenues 68 77
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member] | Revatio [Member]    
Revenue from External Customer [Line Items]    
Revenues 56 65
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member] | Pristiq [Member]    
Revenue from External Customer [Line Items]    
Revenues 53 116
Peri-LOE Products [Member] | Essential Health Business [Member] | EH [Member] | All Other Peri-LOE Products [Member]    
Revenue from External Customer [Line Items]    
Revenues 49 53
Biosimilars [Member] | Essential Health Business [Member] | EH [Member]    
Revenue from External Customer [Line Items]    
Revenues [9] 173 105
Biosimilars [Member] | Essential Health Business [Member] | EH [Member] | Inflectra/Remsima [Member]    
Revenue from External Customer [Line Items]    
Revenues 145 78
Biosimilars [Member] | Essential Health Business [Member] | EH [Member] | All Other Biosimilars [Member]    
Revenue from External Customer [Line Items]    
Revenues 29 27
CentreOne [Member] | Essential Health Business [Member] | EH [Member]    
Revenue from External Customer [Line Items]    
Revenues [10] 171 182
Hospira Infusion Systems (HIS) [Member] | Essential Health Business [Member] | EH [Member]    
Revenue from External Customer [Line Items]    
Revenues [11] 0 97
Internal Medicine [Member] | Innovative Health Business [Member] | IH [Member]    
Revenue from External Customer [Line Items]    
Revenues 2,347 2,377
Internal Medicine [Member] | Innovative Health Business [Member] | IH [Member] | Lyrica [Member]    
Revenue from External Customer [Line Items]    
Revenues [2] 1,131 1,131
Internal Medicine [Member] | Innovative Health Business [Member] | IH [Member] | Eliquis [Member]    
Revenue from External Customer [Line Items]    
Revenues 765 564
Internal Medicine [Member] | Innovative Health Business [Member] | IH [Member] | Chantix / Champix [Member]    
Revenue from External Customer [Line Items]    
Revenues 251 239
Internal Medicine [Member] | Innovative Health Business [Member] | IH [Member] | B M P 2 [Member]    
Revenue from External Customer [Line Items]    
Revenues 73 62
Internal Medicine [Member] | Innovative Health Business [Member] | IH [Member] | Toviaz [Member]    
Revenue from External Customer [Line Items]    
Revenues 60 63
Internal Medicine [Member] | Innovative Health Business [Member] | IH [Member] | Viagra [Member]    
Revenue from External Customer [Line Items]    
Revenues [3] 0 249
Internal Medicine [Member] | Innovative Health Business [Member] | IH [Member] | All Other Internal Medicine [Member]    
Revenue from External Customer [Line Items]    
Revenues 66 69
Vaccines [Member] | Innovative Health Business [Member] | IH [Member]    
Revenue from External Customer [Line Items]    
Revenues 1,463 1,465
Vaccines [Member] | Innovative Health Business [Member] | IH [Member] | Prevnar 13/Prevenar 13 [Member]    
Revenue from External Customer [Line Items]    
Revenues 1,380 1,392
Vaccines [Member] | Innovative Health Business [Member] | IH [Member] | All other Vaccines [Member]    
Revenue from External Customer [Line Items]    
Revenues 83 73
Oncology [Member] | Innovative Health Business [Member] | IH [Member]    
Revenue from External Customer [Line Items]    
Revenues 1,697 1,347
Oncology [Member] | Innovative Health Business [Member] | IH [Member] | Ibrance [Member]    
Revenue from External Customer [Line Items]    
Revenues 933 679
Oncology [Member] | Innovative Health Business [Member] | IH [Member] | Sutent [Member]    
Revenue from External Customer [Line Items]    
Revenues 262 250
Oncology [Member] | Innovative Health Business [Member] | IH [Member] | Xtandi Alliance [Member]    
Revenue from External Customer [Line Items]    
Revenues 159 131
Oncology [Member] | Innovative Health Business [Member] | IH [Member] | Xalkori [Member]    
Revenue from External Customer [Line Items]    
Revenues 153 142
Oncology [Member] | Innovative Health Business [Member] | IH [Member] | Inlyta [Member]    
Revenue from External Customer [Line Items]    
Revenues 74 85
Oncology [Member] | Innovative Health Business [Member] | IH [Member] | Bosulif [Member]    
Revenue from External Customer [Line Items]    
Revenues 60 47
Oncology [Member] | Innovative Health Business [Member] | IH [Member] | All other Oncology [Member]    
Revenue from External Customer [Line Items]    
Revenues 57 14
Inflammation and Immunology (I&I) [Member] | Innovative Health Business [Member] | IH [Member]    
Revenue from External Customer [Line Items]    
Revenues 869 871
Inflammation and Immunology (I&I) [Member] | Innovative Health Business [Member] | IH [Member] | Enbrel (Outside the U.S. and Canada) [Member]    
Revenue from External Customer [Line Items]    
Revenues 506 588
Inflammation and Immunology (I&I) [Member] | Innovative Health Business [Member] | IH [Member] | Xeljanz [Member]    
Revenue from External Customer [Line Items]    
Revenues 326 250
Inflammation and Immunology (I&I) [Member] | Innovative Health Business [Member] | IH [Member] | Eucrisa [Member]    
Revenue from External Customer [Line Items]    
Revenues 26 9
Inflammation and Immunology (I&I) [Member] | Innovative Health Business [Member] | IH [Member] | All Other Inflammation and Immunology Products [Member]    
Revenue from External Customer [Line Items]    
Revenues 11 24
Rare Disease [Member] | Innovative Health Business [Member] | IH [Member]    
Revenue from External Customer [Line Items]    
Revenues 549 507
Rare Disease [Member] | Innovative Health Business [Member] | IH [Member] | BeneFIX [Member]    
Revenue from External Customer [Line Items]    
Revenues 147 149
Rare Disease [Member] | Innovative Health Business [Member] | IH [Member] | Genotropin [Member]    
Revenue from External Customer [Line Items]    
Revenues 132 104
Rare Disease [Member] | Innovative Health Business [Member] | IH [Member] | ReFacto AF/ Xyntha [Member]    
Revenue from External Customer [Line Items]    
Revenues 130 130
Rare Disease [Member] | Innovative Health Business [Member] | IH [Member] | Somavert [Member]    
Revenue from External Customer [Line Items]    
Revenues 63 56
Rare Disease [Member] | Innovative Health Business [Member] | IH [Member] | All Other Rare Disease [Member]    
Revenue from External Customer [Line Items]    
Revenues 76 67
Consumer Healthcare [Member] | Innovative Health Business [Member] | IH [Member]    
Revenue from External Customer [Line Items]    
Revenues $ 905 $ 848
[1] Amounts may not add due to rounding.
[2] Lyrica revenues from all of Europe, Russia, Turkey, Israel and Central Asia countries are included in Lyrica EH. All other Lyrica revenues are included in Lyrica IH. Total Lyrica revenues represent the aggregate of worldwide revenues from Lyrica IH and Lyrica EH.
[3] Viagra lost exclusivity in the U.S. in December 2017. Beginning in 2018, revenues for Viagra in the U.S. and Canada, which were reported in IH through 2017, are reported in EH (which reported all other Viagra revenues excluding the U.S. and Canada through 2017). Therefore, total Viagra revenues in 2018 are reported in EH. Total Viagra revenues in 2017 represent the aggregate of worldwide revenues from Viagra IH and Viagra EH.
[4] The IH business encompasses Internal Medicine, Vaccines, Oncology, Inflammation & Immunology, Rare Disease and Consumer Healthcare.
[5] The EH business encompasses Legacy Established Products, Sterile Injectable Pharmaceuticals, Peri-LOE Products, Biosimilars, Pfizer CentreOne and HIS (through February 2, 2017).
[6] Legacy Established Products primarily include products that have lost patent protection (excluding Sterile Injectable Pharmaceuticals and Peri-LOE Products). In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
[7] Sterile Injectable Pharmaceuticals includes branded and generic injectables (excluding Peri-LOE Products). In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in the first quarter of 2018, Hisun Pfizer-related revenues, previous reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
[8] Peri-LOE Products includes products that have recently lost or are anticipated to soon lose patent protection. These products primarily include: Lyrica in Europe, Russia, Turkey, Israel and Central Asia; worldwide revenues for Celebrex, Pristiq, Zyvox, Vfend, Revatio and Inspra; and beginning in 2018, Viagra revenues for all countries (and Viagra revenues for all countries other than the U.S. and Canada in 2017, see note (c) above).
[9] Biosimilars includes Inflectra/Remsima (biosimilar infliximab) in the U.S. and certain international markets, Nivestim (biosimilar filgrastim) in certain European, Asian and Africa/Middle Eastern markets and Retacrit (biosimilar epoetin zeta) in certain European and Africa/Middle Eastern markets.
[10] Pfizer CentreOne includes revenues from our contract manufacturing and active pharmaceutical ingredient sales operation, including sterile injectables contract manufacturing, and revenues related to our manufacturing and supply agreements, including with Zoetis Inc. In the fourth quarter of 2017, we sold our equity share in Hisun Pfizer. As a result, effective in first-quarter 2018, Hisun Pfizer-related revenues, previously reported in emerging markets within All Other LEP and All Other SIP, are reported in emerging markets within Pfizer CentreOne.
[11] HIS (through February 2, 2017) includes Medication Management Systems products composed of infusion pumps and related software and services, as well as IV Infusion Products, including large volume IV solutions and their associated administration sets.