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Other (Income)/Deductions - Net (Tables) | 9 Months Ended
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Oct. 02, 2022
Other Income and Expenses [Abstract] |
Schedule of Other (Income)/Deductions - Net |
Components of Other (income)/deductions––net include:
|  | Three Months Ended |  | Nine Months Ended
(MILLIONS) |  | October 2, 2022 |  | October 3, 2021 |  | October 2, 2022 |  | October 3, 2021
Interest income |  | $ | (70) |  |  | $ | (10) |  |  | $ | (114) |  |  | $ | (21) |
Interest expense |  | 311 |  |  | 325 |  |  | 925 |  |  | 975 |
Net interest expense |  | 240 |  |  | 315 |  |  | 811 |  |  | 954 |
Royalty-related income |  | (239) |  |  | (261) |  |  | (628) |  |  | (649) |
Net (gains)/losses on asset disposals |  | 7 |  |  | (1) |  |  | 6 |  |  | (99) |
Net (gains)/losses recognized during the period on equity securities(a) |  | 112 |  |  | (400) |  |  | 1,353 |  |  | (1,601) |
Income from collaborations, out-licensing arrangements and sales of compound/product rights(b) |  | (4) |  |  | (65) |  |  | (17) |  |  | (317) |
Net periodic benefit costs/(credits) other than service costs |  | (306) |  |  | (1,132) |  |  | (294) |  |  | (1,635) |
Certain legal matters, net |  | 77 |  |  | 38 |  |  | 175 |  |  | 112 |
Certain asset impairments(c) |  | 200 |  |  | — |  |  | 200 |  |  | — |
Haleon/Consumer Healthcare JV equity method (income)/loss(d) |  | 51 |  |  | (105) |  |  | (283) |  |  | (307) |
Other, net |  | (198) |  |  | (84) |  |  | (260) |  |  | (502) |
Other (income)/deductions––net |  | $ | (59) |  |  | $ | (1,696) |  |  | $ | 1,063 |  |  | $ | (4,043) |
(a)The losses in the first nine months of 2022 include, among other things, unrealized losses of $974 million related to investments in BioNTech, Cerevel Therapeutics Holdings, Inc. (Cerevel) and Arvinas. The gains in the third quarter and first nine months of 2021 included, among other things, unrealized gains of $420 million and $1.5 billion, respectively, related to investments in BioNTech and Cerevel. (b)The first nine months of 2021 included, among other things, $188 million of net collaboration income from BioNTech in the first quarter of 2021 related to Comirnaty. (c)The amount in the third quarter and first nine months of 2022 represents an intangible asset impairment charge associated with our Biopharma segment, representing an IPR&D asset for the unapproved indication of symptomatic dilated cardiomyopathy (DCM) due to a mutation of the gene encoding the lamin A/C protein (LMNA), acquired in our Array BioPharma Inc. acquisition. The intangible asset impairment charge was a result of the Phase 3 trial reaching futility at a pre-planned interim analysis. (d)See Note 2C.
Schedule of Impaired Intangible Assets |
Additional information about the intangible asset that was impaired during 2022 (impairment recorded in Other (income)/deductions–net) follows:
|  | Fair Value(a) |  | Nine Months Ended October 2, 2022
(MILLIONS) |  | Amount |  | Level 1 |  | Level 2 |  | Level 3 |  | Impairment
Intangible asset––IPR&D(b) |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 200 |
(a)The fair value amount is presented as of the date of impairment, as this asset is not measured at fair value on a recurring basis. See also Note 1F in our 2021 Form 10-K. (b)Reflects an intangible asset written down to fair value in 2022. Fair value was determined using the income approach, specifically the multi-period excess earnings method, also known as the discounted cash flow method. We started with a forecast of all the expected net cash flows for the asset and then applied an asset-specific discount rate to arrive at a net present value amount. Some of the more significant estimates and assumptions inherent in this approach include: the amount and timing of the projected net cash flows, which includes the expected impact of competitive, legal and/or regulatory forces on the product; the discount rate, which seeks to reflect the various risks inherent in the projected cash flows; and the tax rate, which seeks to incorporate the geographic diversity of the projected cash flows.

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- Definition Tabular disclosure of impaired intangible assets excluding goodwill. This may include a description of the facts and circumstances leading to the recording of impairment charges of intangible assets in the period, the amount of the impairment charges, the methods of determining fair value of the associated assets, the caption in the income statement in which the impairment losses are aggregated, and the segment in which the impaired intangible assets are reported. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI https://asc.fasb.org/extlink&oid=66006027&loc=d3e16373-109275 + Details
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- Definition Tabular disclosure of the components of non-operating income or non-operating expense that may include amounts earned from dividends, interest on securities, gains (losses) on securities sold, equity earnings of unconsolidated affiliates, net gain (loss) on sales of business, interest expense and other miscellaneous income or expense items. + References No definition available. + Details
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