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Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Effect of Net Investment Hedges
The effects of the Company’s net investment hedges on OCI and the Consolidated Statement of Income are shown below:
Amount of Pretax (Gain) Loss Recognized in Other Comprehensive Income (1)
Amount of Pretax (Gain) Loss Recognized in Other (income) expense, net for Amounts Excluded from Effectiveness Testing
Years Ended December 31202420232022202420232022
Net Investment Hedging Relationships
Foreign exchange contracts$(30)$— $(48)$(4)$1 $(1)
Euro-denominated notes(192)105 (162)— — — 
(1)    No amounts were reclassified from AOCL into income related to the sale of a subsidiary.
Summary of Interest Rate Derivatives
At December 31, 2024, the Company was a party to six pay-floating, receive-fixed interest rate swap contracts designated as fair value hedges of the fixed-rate notes as detailed in the table below.
Par Value of DebtNumber of Interest Rate Swaps HeldTotal Swap Notional Amount
4.50% notes due 2033
$1,500 6 $1,500 
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position
The table below presents the location of amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges as of December 31:
Carrying Amount of Hedged Liabilities
Cumulative Amount of Fair Value Hedging Adjustment Increase Included in the Carrying Amount
2024202320242023
Balance Sheet Caption
Long-Term Debt $1,509 $1,056 $17 $56 
Fair Value of Derivatives on a Gross Basis Segregated Between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments
Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments as of December 31:
  20242023
  Fair Value of
Derivative		U.S. Dollar
Notional		Fair Value of
Derivative		U.S. Dollar
Notional
 AssetLiabilityAssetLiability
Derivatives Designated as Hedging InstrumentsBalance Sheet Caption      
Interest rate swap contracts
Other Assets
$17 $— $1,500 $57 $— $1,000 
Foreign exchange contractsOther current assets323 — 8,662 106 — 6,138 
Foreign exchange contractsOther Assets66 — 2,125 26 — 1,929 
Foreign exchange contractsAccrued and other current liabilities— 1 162 — 76 3,680 
Foreign exchange contractsOther Noncurrent Liabilities— 1 16 — 1 7 
  $406 $2 $12,465 $189 $77 $12,754 
Derivatives Not Designated as Hedging InstrumentsBalance Sheet Caption      
Foreign exchange contractsOther current assets$323 $— $12,544 $153 $— $9,693 
Foreign exchange contractsAccrued and other current liabilities— 343 13,551 — 162 8,104 
  $323 $343 $26,095 $153 $162 $17,797 
  $729 $345 $38,560 $342 $239 $30,551 
Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes as of December 31:
20242023
AssetLiabilityAssetLiability
Gross amounts recognized in the consolidated balance sheet$729 $345 $342 $239 
Gross amounts subject to offset in master netting arrangements not offset in the consolidated balance sheet(299)(299)(215)(215)
Cash collateral received
(165)— (3)— 
Net amounts$265 $46 $124 $24 
Location and Pretax Gain or Loss Amounts for Derivatives
The table below provides information regarding the location and amount of pretax gains and losses of derivatives designated in fair value or cash flow hedging relationships:
Years Ended December 31202420232022202420232022202420232022
Financial Statement Caption in which Effects of Fair Value or Cash Flow Hedges are RecordedSales
Other (income) expense, net (1)
Other comprehensive income (loss)
$64,168 $60,115 $59,283 $(24)$466 $1,501 $216 $(393)$(339)
(Gain) loss on fair value hedging relationships:
Interest rate swap contracts
Hedged items— — — (39)56 (13)— — — 
Derivatives designated as hedging instruments— — — 39 (57)4 — — — 
Impact of cash flow hedging relationships:
Foreign exchange contracts
Amount of gain recognized in OCI on derivatives
— — — — — — 508 114 684 
Increase in Sales as a result of AOCL reclassifications
167 249 773 — — — (167)(249)(773)
Interest rate contracts
Amount of gain recognized in Other (income) expense, net on derivatives
— — — (1)(1)(2)— — — 
Amount of (loss) gain recognized in OCI on derivatives
— — — — — — (1)13 (2)
(1)    Interest expense is a component of Other (income) expense, net.
Income Statement Effects of Derivatives Not Designated as Hedging Instruments
The table below provides information regarding the income statement effects of derivatives not designated as hedging instruments:
Amount of Derivative Pretax Loss (Gain) Recognized in Income
Years Ended December 31202420232022
Derivatives Not Designated as Hedging InstrumentsIncome Statement Caption
Foreign exchange contracts (1)
Other (income) expense, net$251 $(6)$(49)
Foreign exchange contracts (2)
Sales(28)5 (37)
(1)    These derivative contracts primarily mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates.
(2)     These derivative contracts serve as economic hedges of forecasted transactions.
Information on Investments in Debt and Equity Securities
Information on investments in debt and equity securities at December 31 is as follows:
 
 20242023
 Amortized
Cost		Gross UnrealizedFair
Value		Amortized
Cost		Gross UnrealizedFair
Value
GainsLossesGainsLosses
Commercial paper$348 $— $— $348 $252 $— $— $252 
U.S. government and agency securities188 — — 188 72— — 72 
Corporate notes and bonds— — — — 13 — — 13 
Total debt securities$536 $— $— $536 $337 $— $— $337 
Publicly traded equity securities (1)
920 764 
Total debt and publicly traded equity securities$1,456 $1,101 
(1)    Unrealized net losses of $30 million were recorded in Other (income) expense, net in 2024 on equity securities still held at December 31, 2024. Unrealized net gains of $411 million were recorded in Other (income) expense, net in 2023 on equity securities still held at December 31, 2023.
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis
Financial assets and liabilities measured at fair value on a recurring basis at December 31 are summarized below:
 Fair Value Measurements UsingFair Value Measurements Using
Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
  20242023
Assets
Investments
Commercial paper$— $348 $— $348 $— $252 $— $252 
U.S. government and agency securities— 99 — 99 — — — — 
Publicly traded equity securities463 — — 463 252 — — 252 
 463 447 — 910 252 252 — 504 
Other assets (1)
U.S. government and agency securities89 — — 89 72 — — 72 
Corporate notes and bonds— — — — 13 — — 13 
Publicly traded equity securities (2)
457 — — 457 512 — — 512 
546 — — 546 597 — — 597 
Derivative assets (3)
Forward exchange contracts— 499 — 499 — 202 — 202 
Purchased currency options— 213 — 213 — 83 — 83 
Interest rate swaps— 17 — 17 — 57 — 57 
 — 729 — 729 — 342 — 342 
Total assets$1,009 $1,176 $— $2,185 $849 $594 $— $1,443 
Liabilities
Other liabilities
Contingent consideration$— $— $193 $193 $— $— $354 $354 
Derivative liabilities (3)
Forward exchange contracts— 338 — 338 — 239 — 239 
Written currency options— 7 — 7 — — — — 
— 345 — 345 — 239 — 239 
Total liabilities$— $345 $193 $538 $— $239 $354 $593 
(1)    Investments included in other assets are restricted as to use, including for the payment of benefits under employee benefit plans.
(2)    Balance at December 31, 2024 includes securities with a fair value of $81 million, which are subject to a contractual sale restriction that expires in March 2025. Balance at December 31, 2023 includes securities with a fair value of $177 million, which were subject to a contractual sale restriction that expired in July 2024.
(3)    The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant.
Summarized Information about the Changes in Liabilities for Contingent Consideration
Summarized information about the changes in the fair value of liabilities for contingent consideration associated with business combinations is as follows:
20242023
Fair value January 1$354 $456 
Changes in estimated fair value (1)
(10)15 
Payments(151)(117)
Fair value December 31 (2)
$193 $354 
(1)    Recorded in Cost of sales, Research and development expenses, and Other (income) expense, net. Includes cumulative translation adjustments.
(2)    Balance at December 31, 2024 includes $148 million of current liabilities, of which $123 million relates to the termination of the Sanofi Pasteur MSD joint venture in 2016. As part of the termination, Merck recorded a liability for contingent future royalty payments of 11.5% on net sales of all Merck products that were previously sold by the joint venture through December 31, 2024. The fair value of this liability is determined utilizing the estimated amount and timing of projected cash flows using a risk-adjusted discount rate to present value the cash flows.