Fair Value Measurements (Tables)

3 Months Ended

Mar. 30, 2014

Fair Value Disclosures [Abstract]

Summary of designated derivatives

The following table is a summary of the activity related to derivatives designated as cash flow hedges for the fiscal first quarters in 2014 and 2013:

	Gain/(Loss) Recognized In Accumulated OCI(1)					Gain/(Loss) Reclassified From Accumulated OCI Into Income(1)				Gain/(Loss) Recognized In Other Income/Expense(2)
(Dollars in Millions)	Fiscal First Quarters Ended
Cash Flow Hedges By Income Statement Caption	March 30, 2014			March 31, 2013		March 30, 2014		March 31, 2013		March 30, 2014		March 31, 2013
Sales to customers(3)	$	(34	)	(37	)	(13	)	(3	)	—		—
Cost of products sold(3)	17			5		75		(17	)	—		(2	)
Research and development expense(3)	13			10		5		(3	)	(1	)	(3	)
Interest (income)/Interest expense, net(4)	12			(10	)	(5	)	(2	)	—		—
Other (income) expense, net(3)	2			37		(9	)	7		(1	)	—
Total	$	10		5		53		(18	)	(2	)	(5	)

Financial assets and liabilities at fair value

The Company’s significant financial assets and liabilities measured at fair value as of March 30, 2014 and December 29, 2013 were as follows:

	March 30, 2014					December 29, 2013
(Dollars in Millions)	Level 1		Level 2	Level 3	Total	Total(1)
Derivatives designated as hedging instruments:
Assets
Forward foreign exchange contracts	$	—	431	—	431	537
Interest rate contracts(2)	—		211	—	211	169
Total	—		642	—	642	706
Liabilities:
Forward foreign exchange contracts	—		141	—	141	133
Interest rate contracts(3)(4)	—		12	—	12	26
Total	—		153	—	153	159
Derivatives not designated as hedging instruments:
Assets:
Forward foreign exchange contracts	—		23	—	23	25
Liabilities:
Forward foreign exchange contracts	—		49	—	49	29
Other Investments(5)	$	417	—	—	417	333

(1) As of December 29, 2013, these assets and liabilities are classified as Level 2 with the exception of Other investments of $333 million, which are classified as Level 1.

(2) Includes $210 million and $169 million of non-current assets for March 30, 2014 and December 29, 2013, respectively.

(3) Includes $12 million and $19 million of non-current liabilities for March 30, 2014 and December 29, 2013, respectively.

(4) Includes cross currency interest rate swaps and interest rate swaps.

(5) Classified as non-current other assets.

Financial assets and liabilities not measured at fair value

Financial Instruments not measured at Fair Value:

The following financial assets and liabilities are held at carrying amount on the consolidated balance sheet as of March 30, 2014:

(Dollars in Millions)	Carrying Amount		Estimated Fair Value
Financial Assets
Current Investments
Cash	$	2,342	2,342
Government securities and obligations	13,140		13,141
Reverse repurchase agreements	10,203		10,203
Corporate debt securities	1,853		1,853
Money market funds	1,308		1,308
Time deposits	546		546
Total cash, cash equivalents and current marketable securities	$	29,392	29,393
Fair value of government securities and obligations and corporate debt securities was estimated using quoted broker prices and significant other observable inputs.
Financial Liabilities
Current Debt	$	3,949	3,949
Non-Current Debt
2.15% Notes due 2016	898		925
3 month LIBOR+0.07% FRN due 2016	800		801
0.70% Notes due 2016	400		400
5.55% Debentures due 2017	1,000		1,137
5.15% Debentures due 2018	898		1,026
1.65% Notes due 2018	599		597
4.75% Notes due 2019 (1B Euro 1.3768)	1,371		1,632
3% Zero Coupon Convertible Subordinated Debentures due in 2020	178		288
2.95% Debentures due 2020	542		564
3.55% Notes due 2021	446		481
6.73% Debentures due 2023	250		320
3.375% Notes due 2023	550		568
5.50% Notes due 2024 (500 GBP 1.6627)	826		990
6.95% Notes due 2029	296		403
4.95% Debentures due 2033	500		565
4.375% Notes due 2033	646		695
5.95% Notes due 2037	995		1,238
5.85% Debentures due 2038	700		859
4.50% Debentures due 2040	539		565
4.85% Notes due 2041	298		329
4.50% Notes due 2043	499		518
Other	112		112
Total Non-Current Debt	$	13,343	15,013

The weighted average effective interest rate on non-current debt is 4.42%.

Fair value of the non-current debt was estimated using market prices, which were corroborated by quoted broker prices and significant other observable inputs.