Financial Instruments, Derivatives and Fair Value Measures (Tables)

9 Months Ended

Sep. 30, 2020

Financial Instruments, Derivatives and Fair Value Measures

Summary of the amounts and location of certain derivative financial instruments

	Fair Value - Assets					Fair Value - Liabilities
	Sept. 30,		Dec. 31,			Sept. 30,		Dec. 31,
(in millions)	2020		2019		Balance Sheet Caption	2020		2019		Balance Sheet Caption
Interest rate swaps designated as fair value hedges	$	232	$	48	Deferred income taxes and other assets	$	—	$	—	Post-employment obligations, deferred income taxes and other long-term liabilities
Foreign currency forward exchange contracts:
Hedging instruments		89		110	Prepaid expenses and other receivables		241		56	Other accrued liabilities
Others not designated as hedges		37		38	Prepaid expenses and other receivables		62		33	Other accrued liabilities
Debt designated as a hedge of net investment in a foreign subsidiary		—		—	n/a		566		546	Long-term debt
	$	358	$	196		$	869	$	635

Schedule of derivatives gain (loss) in OCI and earnings

	Gain (loss) Recognized in Other								Income (expense) and Gain (loss)
	Comprehensive Income (loss)								Reclassified into Income
	Three Months				Nine Months				Three Months				Nine Months
	Ended Sept. 30				Ended Sept. 30				Ended Sept. 30				Ended Sept. 30
(in millions)	2020		2019		2020		2019		2020		2019		2020		2019		Income Statement Caption
Foreign currency forward exchange contracts designated as cash flow hedges	$	103	$	99	$	(35)	$	78	$	48	$	26	$	90	$	58	Cost of products sold
Debt designated as a hedge of net investment in a foreign subsidiary		(10)		—		(20)		—		—		—		—		—	n/a
Interest rate swaps designated as fair value hedges		n/a		n/a		n/a		n/a		(11)		35		184		174	Interest expense

Schedule of carrying values and fair values of certain financial instruments

	September 30, 2020				December 31, 2019
	Carrying		Fair		Carrying		Fair
(in millions)	Value		Value		Value		Value
Long-term Investment Securities:
Equity securities	$	755	$	755	$	836	$	836
Other		48		48		47		47
Total Long-term Debt		(18,355)		(22,224)		(17,938)		(20,772)
Foreign Currency Forward Exchange Contracts:
Receivable position		126		126		148		148
(Payable) position		(303)		(303)		(89)		(89)
Interest Rate Hedge Contracts:
Receivable position		232		232		48		48

Schedule of assets and liabilities measured at fair value on a recurring basis

			Basis of Fair Value Measurement
			Quoted		Significant
			Prices in		Other		Significant
	Outstanding		Active		Observable		Unobservable
(in millions)	Balances		Markets		Inputs		Inputs
September 30, 2020:
Equity securities	$	351	$	351	$	—	$	—
Interest rate swap derivative financial instruments		232		—		232		—
Foreign currency forward exchange contracts		126		—		126		—
Total Assets	$	709	$	351	$	358	$	—
Fair value of hedged long-term debt	$	3,070	$	—	$	3,070	$	—
Foreign currency forward exchange contracts		303		—		303		—
Contingent consideration related to business combinations		68		—		—		68
Total Liabilities	$	3,441	$	—	$	3,373	$	68
December 31, 2019:
Equity securities	$	357	$	357	$	—	$	—
Interest rate swap derivative financial instruments		48		—		48		—
Foreign currency forward exchange contracts		148		—		148		—
Total Assets	$	553	$	357	$	196	$	—
Fair value of hedged long-term debt	$	2,890	$	—	$	2,890	$	—
Foreign currency forward exchange contracts		89		—		89		—
Contingent consideration related to business combinations		68		—		—		68
Total Liabilities	$	3,047	$	—	$	2,979	$	68