Derivative instruments - (Tables)

12 Months Ended

Dec. 31, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of notional amounts and interest rates for cross-currency swaps

The notional amounts and interest rates of our cross-currency swaps as of December 31, 2019, were as follows (notional amounts in millions):



	Foreign currency				U.S. dollars
Hedged notes	Notional amounts		Interest rates		Notional amounts		Interest rates
1.25% 2022 euro Notes	€	1,250	1.3	%	$	1,388	3.2	%
0.41% 2023 Swiss franc Bonds	CHF	700	0.4	%	$	704	3.4	%
2.00% 2026 euro Notes	€	750	2.0	%	$	833	3.9	%
5.50% 2026 pound sterling Notes	£	475	5.5	%	$	747	6.0	%
4.00% 2029 pound sterling Notes	£	700	4.0	%	$	1,111	4.5	%

Effective portion of the unrealized gain (loss) recognized in Other Comprehensive Income for our derivative instruments designated as cash flow hedges

The unrealized gains and losses recognized in AOCI for our derivative instruments designated as cash flow hedges were as follows (in millions):



	Years ended December 31,
Derivatives in cash flow hedging relationships	2019			2018			2017
Foreign currency contracts	$	148		$	348		$	(402	)
Cross-currency swap contracts	(21		)	(287		)	581
Forward interest rate contracts	—			—			13
Total unrealized gains	$	127		$	61		$	192

Derivatives in fair value hedging relationships

The hedged liabilities and related cumulative-basis adjustments for fair value hedges of those liabilities were recorded in the Consolidated Balance Sheets as follows (in millions):



	Carrying amounts of hedged liabilities⁽¹⁾				Cumulative amounts of fair value hedging adjustments related to the carrying amounts of the hedged liabilities⁽²⁾
	December 31,				December 31,
Consolidated Balance Sheets locations	2019		2018		2019		2018
Current portion of long-term debt	$	903	$	2,396	$	4	$	(3	)
Long-term debt	$	8,814	$	9,361	$	292	$	(50	)

^____________


⁽¹⁾	Current portion of long-term debt includes $1.0 billion of carrying value with discontinued hedging relationships as of December 31, 2018. Long-term debt includes $136 million and $137 million of carrying value with discontinued hedging relationships as of December 31, 2019 and 2018, respectively.

⁽²⁾

Current portion of long-term debt includes $3 million of hedging adjustments on discontinued hedging relationships as of December 31, 2018. Long-term debt includes $36 million and $37 million of hedging adjustments on discontinued hedging relationships as of December 31, 2019 and 2018, respectively.

Summary of amounts of income and expense line items

The following tables summarize the amounts recorded in income and expense line items and the effects thereon from fair value and cash flow hedging, including discontinued hedging relationships (in millions):



	Year ended December 31, 2019
	Product sales		Interest and other income, net		Interest (expense), net
Total amounts recorded in income and (expense) line items presented in the Consolidated Statements of Income	$	22,204	$	753	$	(1,289	)
The effects of cash flow and fair value hedging:
Gains on cash flow hedging relationships reclassified out of AOCI:
Foreign currency contracts	$	101	$	—	$	—
Cross-currency swap contracts	$	—	$	110	$	—
(Losses) gains on fair value hedging relationships—interest rate swap agreements:
Hedged items⁽¹⁾	$	—	$	—	$	(349	)
Derivatives designated as hedging instruments	$	—	$	—	$	352



	Year ended December 31, 2018
	Product sales			Interest and other income, net			Interest (expense), net
Total amounts recorded in income and (expense) line items presented in the Consolidated Statements of Income	$	22,533		$	674		$	(1,392	)
The effects of cash flow and fair value hedging:
Losses on cash flow hedging relationships reclassified out of AOCI:
Foreign currency contracts	$	(21	)	$	—		$	—
Cross-currency swap contracts	$	—		$	(241	)	$	—
Gains (losses) on fair value hedging relationships—interest rate swap agreements:
Hedged items⁽¹⁾	$	—		$	—		$	65
Derivatives designated as hedging instruments	$	—		$	—		$	(42	)



	Year ended December 31, 2017
	Product sales		Interest and other income, net		Interest (expense), net
Total amounts recorded in income and (expense) line items presented in the Consolidated Statements of Income	$	21,795	$	928	$	(1,304	)
The effects of cash flow and fair value hedging:
Gains (losses) on cash flow hedging relationships reclassified out of AOCI:
Foreign currency contracts	$	65	$	—	$	—
Cross-currency swap contracts	$	—	$	574	$	—
Forward interest rate contracts	$	—	$	—	$	(1	)
Gains (losses) on fair value hedging relationships—interest rate swap agreements:
Hedged items⁽¹⁾	$	—	$	—	$	127
Derivatives designated as hedging instruments	$	—	$	—	$	(85	)

^__________

⁽¹⁾

(Losses) gains on hedged items do not completely offset gains (losses) on the related designated hedging instruments due to amortization of the cumulative amounts of fair value hedging adjustments included in the carrying amount of the hedged debt for discontinued hedging relationships.

Fair values of derivatives included in the Consolidated Balance Sheets

The fair values of derivatives included in the Consolidated Balance Sheets were as follows (in millions):



	Derivative assets			Derivative liabilities
December 31, 2019	Consolidated Balance Sheets locations	Fair values		Consolidated Balance Sheets locations	Fair values
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other assets	$	223	Accrued liabilities/ Other noncurrent liabilities	$	31
Cross-currency swap contracts	Other current assets/ Other assets	66		Accrued liabilities/ Other noncurrent liabilities	315
Interest rate swap contracts	Other current assets/ Other assets	259		Accrued liabilities/ Other noncurrent liabilities	—
Total derivatives designated as hedging instruments		548			346
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	1		Accrued liabilities	—
Total derivatives not designated as hedging instruments		1			—
Total derivatives		$	549		$	346

	Derivative assets			Derivative liabilities
December 31, 2018	Consolidated Balance Sheets locations	Fair values		Consolidated Balance Sheets locations	Fair values
Derivatives designated as hedging instruments:
Foreign currency contracts	Other current assets/ Other assets	$	181	Accrued liabilities/ Other noncurrent liabilities	$	26
Cross-currency swap contracts	Other current assets/ Other assets	170		Accrued liabilities/ Other noncurrent liabilities	401
Interest rate swap contracts	Other current assets/ Other assets	56		Accrued liabilities/ Other noncurrent liabilities	149
Total derivatives designated as hedging instruments		407			576
Derivatives not designated as hedging instruments:
Foreign currency contracts	Other current assets	1		Accrued liabilities	—
Total derivatives not designated as hedging instruments		1			—
Total derivatives		$	408		$	576