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FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Jun. 30, 2023

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:


	June 30, 2023						December 31, 2022
Dollars in millions	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Cash and cash equivalents
Money market and other securities	$	—	$	6,644	$	—	$	—	$	7,770	$	—
Marketable debt securities
Certificates of deposit	—		358		—		—		32		—
Commercial paper	—		—		—		—		98		—
Derivative assets	—		357		—		—		305		—
Equity investments	336		512		—		424		680		—
Derivative liabilities	—		180		—		—		213		—
Contingent consideration liability
Contingent value rights	5		—		—		5		—		—
Other acquisition related contingent consideration	—		—		9		—		—		24

Marketable Securities

The following table summarizes marketable debt securities:


	June 30, 2023								December 31, 2022
Dollars in millions	Amortized Cost		Gross Unrealized						Amortized Cost		Gross Unrealized
			Gains		Losses		Fair Value				Gains		Losses		Fair Value
Certificates of deposit	$	358	$	—	$	—	$	358	$	32	$	—	$	—	$	32
Commercial paper	—		—		—		—		98		—		—		98

Total marketable debt securities(a)	$	358	$	—	$	—	$	358	$	130	$	—	$	—	$	130

(a) All marketable debt securities mature within one year as of June 30, 2023, and December 31, 2022.

Schedule of Equity Investments

The following summarizes the carrying amount of equity investments:


Dollars in millions	June 30, 2023		December 31, 2022
Equity investments with readily determinable fair values	$	848	$	1,104
Equity investments without readily determinable fair values	623		537
Limited partnerships and other equity method investments	520		546
Total equity investments	$	1,991	$	2,187

Debt Securities, Trading, and Equity Securities, FV-NI

The following summarizes the activity related to equity investments. Changes in fair value of equity investments are included in Other (income)/expense, net.


	Three Months Ended June 30,		Six Months Ended June 30,
Dollars in millions	2023	2022	2023	2022
Equity investments with readily determinable fair values
Net loss recognized	47	254	188	852
Less: net gain recognized on investments sold	(11)	(16)	(12)	(16)
Net unrealized loss recognized on investments still held	58	270	200	868

Equity investments without readily determinable fair values
Upward adjustments	—	—	(6)	(6)
Impairments and downward adjustments	—	—	—	2
Equity in net loss of affiliates	11	54	31	104

Total equity investment losses	58	308	213	952

Schedule of Derivatives and Fair Value

The following table summarizes the fair value and the notional values of outstanding derivatives:


	June 30, 2023								December 31, 2022
	Asset(a)				Liability(b)				Asset(a)				Liability(b)
Dollars in millions	Notional		Fair Value		Notional		Fair Value		Notional		Fair Value		Notional		Fair Value
Designated as cash flow hedges
Foreign currency exchange contracts	$	5,831	$	243	$	1,656	$	(79)	$	5,771	$	271	$	2,281	$	(80)
Cross-currency swap contracts	1,210		20		—		—		—		—		584		(7)
Designated as net investment hedges
Cross-currency swap contracts	561		13		1,167		(48)		72		1		1,157		(78)
Designated as fair value hedges
Interest rate swap contracts	—		—		3,755		(23)		—		—		255		(18)
Not designated as hedges
Foreign currency exchange contracts	2,370		66		2,334		(30)		1,564		33		1,703		(19)
Total return swap contracts (c)	374		15		—		—		—		—		322		(11)

(a) Included in Other current assets and Other non-current assets.

(b) Included in Other current liabilities and Other non-current liabilities.

Derivative Instruments, Gain (Loss)

The following table summarizes the financial statement classification and amount of (gain)/loss recognized on hedges:


	Three Months Ended June 30, 2023				Six Months Ended June 30, 2023
Dollars in millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Foreign currency exchange contracts	$	(90)	$	(44)	$	(210)	$	(60)
Cross-currency swap contracts	—		(5)		—		(28)
Interest rate swap contracts	—		(4)		—		(7)

	Three Months Ended June 30, 2022				Six Months Ended June 30, 2022
Dollars in millions	Cost of products sold		Other (income)/expense, net		Cost of products sold		Other (income)/expense, net
Foreign currency exchange contracts	$	(131)	$	(18)	$	(213)	$	(75)
Cross-currency swap contracts	—		(4)		—		(8)
Interest rate swap contracts	—		(7)		—		(18)

The following table summarizes the effect of derivative and non-derivative instruments designated as hedges in Other comprehensive income:


	Three Months Ended June 30,				Six Months Ended June 30,
Dollars in millions	2023		2022		2023		2022
Derivatives designated as cash flow hedges
Foreign exchange contracts gain/(loss):
Recognized in Other comprehensive income	$	60	$	481	$	53	$	601
Reclassified to Cost of products sold	(90)		(131)		(210)		(213)
Cross-currency swap contracts gain/(loss):
Recognized in Other comprehensive income	34		—		28		—
Reclassified to Other (income)/expense, net	4		—		(9)		—
Forward starting interest rate swap contract loss:
Reclassified to Other (income)/expense, net	—		—		—		(3)
Derivatives designated as net investment hedges
Cross-currency swap contracts gain/(loss):
Recognized in Other comprehensive income	34		51		35		64
Non-derivatives designated as net investment hedges
Non U.S. dollar borrowings gain/(loss):
Recognized in Other comprehensive income	—		68		(10)		83