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FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2022

Summary of Financial Instruments Measured at Fair Value on Recurring Basis

The following tables summarize our assets and liabilities that are measured at fair value on a recurring basis.


			Basis of fair value measurement
(in millions)	Balance as of June 30, 2022		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Foreign exchange contracts	$	14	$	—	$	14	$	—

Available-for-sale debt securities	44		—		—		44
Marketable equity securities	30		30		—		—
Total	$	88	$	30	$	14	$	44
Liabilities
Foreign exchange contracts	$	9	$	—	$	9	$	—

Contingent payments related to acquisitions	113		—		—		113
Total	$	122	$	—	$	9	$	113


			Basis of fair value measurement
(in millions)	Balance as of December 31, 2021		Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets
Foreign exchange contracts	$	8	$	—	$	8	$	—

Available-for-sale debt securities	30		—		—		30
Marketable equity securities	10		10		—		—
Total	$	48	$	10	$	8	$	30
Liabilities
Foreign exchange contracts	$	5	$	—	$	5	$	—

Contingent payments related to acquisitions	143		—		—		143
Total	$	148	$	—	$	5	$	143

Reconciliation of Fair Value Measurements that Use Significant Unobservable Inputs

The following table is a reconciliation of recurring fair value measurements that use significant unobservable inputs (Level 3), which consist of contingent payments related to acquisitions and available-for-sale debt securities.


	Three months ended June 30,
	2022				2021
(in millions)	Contingent payments related to acquisitions		Available-for-sale debt securities		Contingent payments related to acquisitions
Fair value at beginning of period	$	124	$	53	$	38


Change in fair value recognized in earnings	(11)		—		(5)
Change in fair value recognized in AOCI	—		1		—
Transfers out of Level 3	—		(10)		—

Currency translation	—		—		1
Fair value at end of period	$	113	$	44	$	34


	Six months ended June 30,
	2022				2021
(in millions)	Contingent payments related to acquisitions		Available-for-sale debt securities		Contingent payments related to acquisitions
Fair value at beginning of period	$	143	$	30	$	30
Additions	—		21		24

Change in fair value recognized in earnings	(28)		—		(5)
Change in fair value recognized in AOCI	—		3		—
Payments	(2)		—		(16)
Transfers out of Level 3	—		(10)		—
Currency translation	—		—		1
Fair value at end of period	$	113	$	44	$	34

During the second quarter and first half of 2022, $8 million of available-for-sale debt securities that were previously classified as Level 3 converted to marketable equity securities, which are classified as Level 1 in the fair value hierarchy, upon the initial public offering of the investee.

Book Values and Fair Values of Financial Instruments

the following table provides the values recognized in the condensed consolidated balance sheets and the estimated fair values as of June 30, 2022 and December 31, 2021.


	Book values				Fair values(a)
(in millions)	2022		2021		2022		2021
Liabilities
Short-term debt	$	200	$	301	$	200	$	301
Current maturities of long-term debt and finance lease obligations	208		210		207		212
Long-term debt and finance lease obligations	16,278		17,149		14,996		17,568

(a) These fair value amounts are classified as Level 2 within the fair value hierarchy as they are estimated based on observable inputs.