Fair Value Measurements (Tables)

3 Months Ended

Mar. 30, 2025

Fair Value Disclosures [Abstract]

Summary of Derivative Activity

The following table is a summary of the activity related to derivatives and hedges for the fiscal first quarters ended March 30, 2025 and March 31, 2024, net of tax:

	March 30, 2025					March 31, 2024
(Dollars in Millions)	Sales	Cost of Products Sold	R&D Expense	Interest (Income) Expense	Other (Income) Expense	Sales	Cost of Products Sold	R&D Expense	Interest (Income) Expense	Other (Income) Expense
The effects of fair value, net investment and cash flow hedging:
Gain (Loss) on fair value hedging relationship:
Interest rate swaps contracts:
Hedged items	$—	—	—	188	—	—	—	—	8	—
Derivatives designated as hedging instruments	—	—	—	(188)	—	—	—	—	(8)	—
Gain (Loss) on net investment hedging relationship:
Cross currency interest rate swaps contracts:
Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing	—	—	—	49	—	—	—	—	34	—
Amount of gain or (loss) recognized in AOCI	—	—	—	49	—	—	—	—	34	—
Gain (Loss) on cash flow hedging relationship:
Forward foreign exchange contracts:
Amount of gain or (loss) reclassified from AOCI into income	(1)	10	1	—	—	1	165	4	—	(2)
Amount of gain or (loss) recognized in AOCI	3	105	(36)	—	(11)	(3)	(19)	22	—	4
Cross currency interest rate swaps contracts:
Amount of gain or (loss) reclassified from AOCI into income	—	—	—	83	—	—	—	—	49	—
Amount of gain or (loss) recognized in AOCI	$—	—	—	566	—	—	—	—	(205)	—

The following table is the effect of net investment hedges for the fiscal first quarters ended in 2025 and 2024:

	Gain/(Loss) Recognized In Accumulated OCI		Location of Gain or (Loss) Reclassified from Accumulated OCI Into Income	Gain/(Loss) Reclassified From Accumulated OCI Into Income
(Dollars in Millions)	March 30, 2025	March 31, 2024		March 30, 2025	March 31, 2024
Debt	$(316)	84	Interest (income) expense	—	—
Cross Currency interest rate swaps	$840	728	Interest (income) expense	—	—

Schedule of Derivative Financial Instruments and Classification on Consolidated Balance Sheet

As of March 30, 2025, and December 29, 2024, the following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges:

Line item in the Consolidated Balance Sheet in which the hedged item is included	Carrying Amount of the Hedged Liability		Cumulative Amount of Fair Value Hedging Gain/ (Loss) Included in the Carrying Amount of the Hedged Liability
(Dollars in Millions)	March 30, 2025	December 29, 2024	March 30, 2025	December 29, 2024
Long-term Debt	$8,147	7,935	(889)	(1,132)

Schedule of Effect of Derivatives not Designated as Hedging Instruments

The following table is the effect of derivatives not designated as hedging instruments for the fiscal first quarters ended 2025 and 2024:

		Gain/(Loss) Recognized In Income on Derivative
(Dollars in Millions)	Location of Gain /(Loss) Recognized in Income on Derivative	Fiscal First Quarter Ended
Derivatives Not Designated as Hedging Instruments		March 30, 2025	March 31, 2024
Foreign Exchange Contracts	Other (income) expense	$62	25

Summary of Activity Related to Equity Investments

The following table is a summary of the activity related to equity investments:

	December 29, 2024			March 30, 2025
(Dollars in Millions)	Carrying Value	Changes in Fair Value Reflected in Net Income (1)	(Sales)/ Purchases/Other (2)	Carrying Value	Non Current Other Assets
Equity Investments with readily determinable value	$451	(36)	56	471	471
Equity Investments without readily determinable value	$773	(27)	41	787	787

(1)Recorded in Other (income)/expense, net

(2)Other includes impact of currency

Financial Assets and Liabilities at Fair Value

The Company’s significant financial assets and liabilities measured at fair value as of March 30, 2025 and December 29, 2024 were as follows:

	March 30, 2025				December 29, 2024
(Dollars in Millions)	Level 1	Level 2	Level 3	Total	Total(1)
Derivatives designated as hedging instruments:
Assets:
Forward foreign exchange contracts	$—	389	—	389	660
Interest rate contracts(2)	—	1,285	—	1,285	1,484
Total	—	1,674	—	1,674	2,144
Liabilities:
Forward foreign exchange contracts	—	345	—	345	794
Interest rate contracts(2)	—	3,415	—	3,415	3,753
Total	—	3,760	—	3,760	4,547
Derivatives not designated as hedging instruments:
Assets:
Forward foreign exchange contracts	—	37	—	37	50
Liabilities:
Forward foreign exchange contracts	—	25	—	25	17
Other Investments:
Equity investments(3)	471	—	—	471	451
Debt securities(4)	—	8,448	—	8,448	7,216
Other Liabilities:
Contingent consideration(5)	$—	—	1,231	1,231	1,217

Gross to Net Derivative Reconciliation	March 30, 2025	December 29, 2024
(Dollars in Millions)
Total Gross Assets	$1,711	2,194
Credit Support Agreement (CSA)	(1,700)	(2,172)
Total Net Asset	11	22
Total Gross Liabilities	3,785	4,564
Credit Support Agreement (CSA)	(3,648)	(4,412)
Total Net Liabilities	$137	152

Summarized information about changes in liabilities for contingent consideration for the fiscal first quarters ended March 30, 2025 and March 31, 2024 is as follows:

	March 30, 2025	March 31, 2024
(Dollars in Millions)
Beginning Balance	$1,217	1,092
Changes in estimated fair value(6)	14	22
Additions	—	—
Payments	—	—
Ending Balance	$1,231	1,114

(1)2024 assets and liabilities are all classified as Level 2 with the exception of equity investments of $451 million, which are classified as Level 1 and contingent consideration of $1,217 million, classified as Level 3.

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

(3)Classified as non-current other assets.

(4)Classified within cash equivalents and current marketable securities.

(5)Includes $1,181 million and $1,217 million classified as non-current other liabilities as of March 30, 2025 and December 29, 2024, respectively. Includes $50 million classified as current liabilities as of March 30, 2025.

(6)Ongoing fair value adjustment amounts are primarily recorded in Research and Development expense.

Marketable Securities

The Company's cash, cash equivalents and current marketable securities as of March 30, 2025 comprised:

(Dollars in Millions)	Carrying Amount	Unrealized Gain	Estimated Fair Value	Cash & Cash Equivalents	Current Marketable Securities
Cash	$3,059	—	3,059	3,059	—
U.S. Gov't securities	—	—	—	—	—
Non-U.S. sovereign securities	—	—	—	—	—
U.S. reverse repurchase agreements	6,938	—	6,938	6,938	—
Corporate debt securities(1)	—	—	—	—	—
Money market funds	19,690	—	19,690	19,690	—
Time deposits(1)	646	—	646	646	—
Subtotal	30,333	—	30,333	30,333	—
U.S. Gov’t securities	8,032	1	8,033	8,020	13
U.S. Gov’t Agencies	—	—	—	—	—
Other sovereign securities	180	—	180	64	116
Corporate debt securities	235	—	235	57	178
Subtotal available for sale debt(2)	$8,447	1	8,448	8,141	307
Total cash, cash equivalents and current marketable securities	$38,780	1	38,781	38,474	307

(1)Held to maturity investments are reported at amortized cost and gains or losses are reported in earnings.

(2)Available for sale debt securities are reported at fair value with unrealized gains and losses reported net of taxes in other comprehensive income.

Schedule of Available for Sale Securities Maturities

The contractual maturities of the available for sale securities as of March 30, 2025 are as follows:

(Dollars in Millions)	Cost Basis	Fair Value
Due within one year	$8,428	8,429
Due after one year through five years	19	19
Due after five years through ten years	—	—
Total debt securities	$8,447	8,448

Financial Liabilities not Measured at Fair Value

Financial instruments not measured at fair value

The following financial liabilities are held at carrying amount on the consolidated balance sheet as of March 30, 2025:

(Dollars in Millions)	Carrying Amount	Estimated Fair Value
Financial Liabilities
Current Debt	$13,897	13,855
Non-Current Debt
2.95% Notes due 2027	950	980
0.95% Notes due 2027	1,479	1,395
4.50% Notes due 2027(1)	749	757
2.90% Notes due 2028	1,498	1,452
1.150% Notes due 2028 (750MM Euro 1.0784)	806	772
4.55% Notes due 2028(1)	748	758
4.80% Notes due 2029	1,146	1,175
6.95% Notes due 2029	299	334
2.70% Notes due 2029 (600MM Euro 1.0784)(1)	646	648
1.30% Notes due 2030	1,672	1,499
4.70% Notes due 2030(1)	995	1,017
4.90% Notes due 2031	1,146	1,178
3.20% Notes due 2032 (700MM Euro 1.0784)	752	762
4.85% Notes due 2032(1)	1,242	1,268
4.95% Notes due 2033	499	514
4.375% Notes due 2033	854	838
3.050% Notes due 2033 ( 700MM Euro 1.0784)(1)	752	749
4.95% Notes due 2034	846	870
1.650% Notes due 2035 (1.5B Euro 1.0784)	1,607	1,393
5.00% Notes due 2035(1)	1,243	1,270
3.35% Notes due 2036 (800MM Euro 1.0784)	858	849
3.587% Notes due 2036	897	894
5.95% Notes due 2037	994	1,094
3.625% Notes due 2037	1,387	1,333
3.350% Notes due 2037 (1.0B Euro 1.0784)(1)	1,075	1,058
3.40% Notes due 2038	993	855
5.85% Notes due 2038	697	760
4.50% Notes due 2040	542	524
2.10% Notes due 2040	874	689
4.85% Notes due 2041	298	293
4.50% Notes due 2043	496	464
3.55% Notes due 2044 (1.0B Euro 1.0784)	1,068	1,037
3.60% Notes due 2045 (700MM Euro 1.0784)(1)	749	723
3.73% Notes due 2046	1,979	1,604
3.75% Notes due 2047	852	802
3.50% Notes due 2048	744	569
2.25% Notes due 2050	837	582
5.25% Notes due 2054	843	850

3.70% Notes due 2055 (1.0B Euro 1.0784)(1)	1,072	1,020
2.45% Notes due 2060	1,088	694
Other	83	83
Total Non-Current Debt	$38,355	36,406

(1) In the fiscal first quarter of 2025, the Company issued senior unsecured notes for approximately $9.2 billion. The net proceeds from this offering were used to fund the Intra-Cellular Therapies, Inc. acquisition which closed on April 2, 2025, and for general corporate purposes.