Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2021

Financial Instruments [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy, using a Market Approach:

	As of December 31, 2021						As of December 31, 2020
(MILLIONS)	Total		Level 1		Level 2		Total		Level 1		Level 2
Financial assets:
Short-term investments
Classified as equity securities with readily determinable fair values:
Money market funds	$	5,365	$	—	$	5,365	$	567	$	—	$	567
Classified as available-for-sale debt securities:
Government and agency—non-U.S.	17,318		—		17,318		7,719		—		7,719
Government and agency—U.S.	4,050		—		4,050		982		—		982
Corporate and other	647		—		647		1,008		—		1,008
	22,014		—		22,014		9,709		—		9,709
Total short-term investments	27,379		—		27,379		10,276		—		10,276
Other current assets
Derivative assets:
Interest rate contracts	4		—		4		18		—		18
Foreign exchange contracts	704		—		704		234		—		234
Total other current assets	709		—		709		251		—		251
Long-term investments
Classified as equity securities with readily determinable fair values(a)	3,876		3,849		27		2,809		2,776		32
Classified as available-for-sale debt securities:
Government and agency—non-U.S.	465		—		465		6		—		6
Government and agency—U.S.	6		—		6		121		—		121
Corporate and other	50		—		50		—		—		—
	521		—		521		128		—		128
Total long-term investments	4,397		3,849		548		2,936		2,776		160
Other noncurrent assets
Derivative assets:
Interest rate contracts	16		—		16		117		—		117
Foreign exchange contracts	242		—		242		5		—		5
Total derivative assets	259		—		259		122		—		122
Insurance contracts(b)	808		—		808		693		—		693
Total other noncurrent assets	1,067		—		1,067		814		—		814
Total assets	$	33,552	$	3,849	$	29,703	$	14,278	$	2,776	$	11,501
Financial liabilities:
Other current liabilities
Derivative liabilities:
Foreign exchange contracts	$	476	$	—	$	476	$	501	$	—	$	501
Total other current liabilities	476		—		476		501		—		501
Other noncurrent liabilities
Derivative liabilities:
Foreign exchange contracts	405		—		405		599		—		599
Total other noncurrent liabilities	405		—		405		599		—		599
Total liabilities	$	881	$	—	$	881	$	1,100	$	—	$	1,100

(a)Long-term equity securities of $194 million as of December 31, 2021 and $190 million as of December 31, 2020 were held in restricted trusts for U.S. non-qualified employee benefit plans.

(b)Includes life insurance policies held in restricted trusts for U.S. non-qualified employee benefit plans. The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions—net (see Note 4).

Summary of Investments

The following summarizes our investments by classification type:
	As of December 31,
(MILLIONS)	2021		2020
Short-term investments
Equity securities with readily determinable fair values(a)	$	5,365	$	567
Available-for-sale debt securities	22,014		9,709
Held-to-maturity debt securities	1,746		161
Total Short-term investments	$	29,125	$	10,437
Long-term investments
Equity securities with readily determinable fair values	$	3,876	$	2,809
Available-for-sale debt securities	521		128
Held-to-maturity debt securities	34		37
Private equity securities at cost(b)	623		432
Total Long-term investments	$	5,054	$	3,406
Equity-method investments	16,472		16,856
Total long-term investments and equity-method investments	$	21,526	$	20,262
Held-to-maturity cash equivalents	$	268	$	89

(a)As of December 31, 2021 and 2020, includes money market funds primarily invested in U.S. Treasury and government debt.

(b)Represent investments in the life sciences sector.

Contractual Maturities of Available-for-sale and Held-to-maturity Securities

At December 31, 2021, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
	As of December 31, 2021														As of December 31, 2020
			Gross Unrealized						Maturities (in Years)								Gross Unrealized
(MILLIONS)	Amortized Cost		Gains		Losses		Fair Value		Within 1		Over 1 to 5		Over 5		Amortized Cost		Gains		Losses		Fair Value
Available-for-sale debt securities
Government and agency––non-U.S.	$	18,032	$	13	$	(263)	$	17,783	$	17,318	$	465	$	—	$	7,593	$	136	$	(4)	$	7,725
Government and agency––U.S.	4,056		—		(1)		4,055		4,050		6		—		1,104		—		(1)		1,103
Corporate and other	698		—		(1)		697		647		50		—		1,006		2		—		1,008
Held-to-maturity debt securities
Time deposits and other	947		—		—		947		917		18		11		283		—		—		283
Government and agency––non-U.S.	1,102		—		—		1,102		1,097		4		1		5		—		—		5
Total debt securities	$	24,835	$	14	$	(265)	$	24,584	$	24,029	$	543	$	13	$	9,991	$	138	$	(5)	$	10,124

Schedule of Available-for-sale Securities Reconciliation

At December 31, 2021, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
	As of December 31, 2021														As of December 31, 2020
			Gross Unrealized						Maturities (in Years)								Gross Unrealized
(MILLIONS)	Amortized Cost		Gains		Losses		Fair Value		Within 1		Over 1 to 5		Over 5		Amortized Cost		Gains		Losses		Fair Value
Available-for-sale debt securities
Government and agency––non-U.S.	$	18,032	$	13	$	(263)	$	17,783	$	17,318	$	465	$	—	$	7,593	$	136	$	(4)	$	7,725
Government and agency––U.S.	4,056		—		(1)		4,055		4,050		6		—		1,104		—		(1)		1,103
Corporate and other	698		—		(1)		697		647		50		—		1,006		2		—		1,008
Held-to-maturity debt securities
Time deposits and other	947		—		—		947		917		18		11		283		—		—		283
Government and agency––non-U.S.	1,102		—		—		1,102		1,097		4		1		5		—		—		5
Total debt securities	$	24,835	$	14	$	(265)	$	24,584	$	24,029	$	543	$	13	$	9,991	$	138	$	(5)	$	10,124

Held-to-maturity Securities

At December 31, 2021, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
	As of December 31, 2021														As of December 31, 2020
			Gross Unrealized						Maturities (in Years)								Gross Unrealized
(MILLIONS)	Amortized Cost		Gains		Losses		Fair Value		Within 1		Over 1 to 5		Over 5		Amortized Cost		Gains		Losses		Fair Value
Available-for-sale debt securities
Government and agency––non-U.S.	$	18,032	$	13	$	(263)	$	17,783	$	17,318	$	465	$	—	$	7,593	$	136	$	(4)	$	7,725
Government and agency––U.S.	4,056		—		(1)		4,055		4,050		6		—		1,104		—		(1)		1,103
Corporate and other	698		—		(1)		697		647		50		—		1,006		2		—		1,008
Held-to-maturity debt securities
Time deposits and other	947		—		—		947		917		18		11		283		—		—		283
Government and agency––non-U.S.	1,102		—		—		1,102		1,097		4		1		5		—		—		5
Total debt securities	$	24,835	$	14	$	(265)	$	24,584	$	24,029	$	543	$	13	$	9,991	$	138	$	(5)	$	10,124

Schedule of Gains and Losses on Investment Securities

The following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity method investments, held at the reporting date:
	Year Ended December 31,
(MILLIONS)	2021		2020		2019
Net (gains)/losses recognized during the period on equity securities(a)	$	(1,344)	$	(540)	$	(454)
Less: Net (gains)/losses recognized during the period on equity securities sold during the period	(80)		(24)		(25)
Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date(b)	$	(1,264)	$	(515)	$	(429)

(a)Reported in Other (income)/deductions––net. See Note 4.

(b)Included in net unrealized gains are observable price changes on equity securities without readily determinable fair values. As of December 31, 2021, there were cumulative impairments and downward adjustments of $97 million and upward adjustments of $156 million. Impairments, downward and upward adjustments were not significant in 2021, 2020 and 2019.

Schedule of Short-term Borrowings

Short-term borrowings include:
	As of December 31,
(MILLIONS)	2021		2020
Commercial paper	$	—	$	556
Current portion of long-term debt, principal amount	1,636		2,004
Other short-term borrowings, principal amount(a)	605		145
Total short-term borrowings, principal amount	2,241		2,705
Net unamortized discounts, premiums and debt issuance costs	—		(2)
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted	$	2,241	$	2,703

(a)Primarily includes cash collateral. See Note 7F.

Schedule of Long-term Debt Instruments

The following outlines our senior unsecured long-term debt and the weighted-average stated interest rate by maturity:
	As of December 31,
(MILLIONS)	2021		2020
Notes due 2022 (1.0% for 2020)(a)	$	—	$	1,728
Notes due 2023 (3.2% for 2021 and 2020)	2,550		2,550
Notes due 2024 (3.9% for 2021 and 2020)	2,250		2,250
Notes due 2025 (0.8% for 2021 and 2020)	750		750
Notes due 2026 (2.9% for 2021 and 2020)	3,000		3,000
Notes due 2027 (2.1% for 2021 and 2.0% for 2020)	1,051		1,121
Notes due 2028-2032 (3.1% for 2021 and 3.4% for 2020)	6,660		5,660
Notes due 2033-2037 (5.6% for 2021 and 2020)	4,250		4,250
Notes due 2038-2042 (5.5% for 2021 and 2020)	6,079		6,086
Notes due 2043-2047 (3.7% for 2021 and 2020)	4,858		4,878
Notes due 2048-2050 (3.6% for 2021 and 2020)	3,500		3,500
Total long-term debt, principal amount	34,948		35,774
Net fair value adjustments related to hedging and purchase accounting	1,438		1,562
Net unamortized discounts, premiums and debt issuance costs	(195)		(207)
Other long-term debt	4		4
Total long-term debt, carried at historical proceeds, as adjusted	$	36,195	$	37,133
Current portion of long-term debt, carried at historical proceeds, as adjusted (not included above (1.0% for 2021 and 2.6% for 2020))	$	1,636	$	2,002

(a)Reclassified to the current portion of long-term debt.

Our long-term debt outlined in the above table is generally redeemable by us at any time at varying redemption prices plus accrued and unpaid interest.

Issuances

In August 2021, we issued the following senior unsecured notes at an effective interest rate of 1.79%:
(MILLIONS)		Principal
Interest Rate	Maturity Date	As of December 31, 2021
1.750%(a)	August 18, 2031	$	1,000

(a)The notes may be redeemed by us at any time, in whole, or in part, at a redemption price plus accrued and unpaid interest.

Schedule of Derivative Financial Instruments

The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
(MILLIONS)	As of December 31, 2021						As of December 31, 2020
			Fair Value						Fair Value
	Notional		Asset		Liability		Notional		Asset		Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)	$	29,576	$	787	$	717	$	24,369	$	145	$	1,005
Interest rate contracts	2,250		21		—		1,950		135		—
			808		717				280		1,005
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	21,419	160		164		$	15,063	94		95
Total			$	968	$	881			$	373	$	1,100

(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.8 billion as of December 31, 2021 and $5.0 billion as of December 31, 2020.

Schedule of Derivative Assets at Fair Value

The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
(MILLIONS)	As of December 31, 2021						As of December 31, 2020
			Fair Value						Fair Value
	Notional		Asset		Liability		Notional		Asset		Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)	$	29,576	$	787	$	717	$	24,369	$	145	$	1,005
Interest rate contracts	2,250		21		—		1,950		135		—
			808		717				280		1,005
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	21,419	160		164		$	15,063	94		95
Total			$	968	$	881			$	373	$	1,100

(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.8 billion as of December 31, 2021 and $5.0 billion as of December 31, 2020.

Schedule of Derivative Liabilities at Fair Value

The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
(MILLIONS)	As of December 31, 2021						As of December 31, 2020
			Fair Value						Fair Value
	Notional		Asset		Liability		Notional		Asset		Liability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)	$	29,576	$	787	$	717	$	24,369	$	145	$	1,005
Interest rate contracts	2,250		21		—		1,950		135		—
			808		717				280		1,005
Derivatives not designated as hedging instruments:
Foreign exchange contracts	$	21,419	160		164		$	15,063	94		95
Total			$	968	$	881			$	373	$	1,100

(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.8 billion as of December 31, 2021 and $5.0 billion as of December 31, 2020.

Schedule of Gains/(Losses) Incurred to Hedge or Offset Operational Foreign Exchange or Interest Rate Risk

The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures (including those reported as part of discontinued operations):
	Gains/(Losses) Recognized in OID(a)				Gains/(Losses) Recognized in OCI(a)				Gains/(Losses) Reclassified from OCI into OID and COS(a)
	Year Ended December 31,
(MILLIONS)	2021		2020		2021		2020		2021		2020
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Foreign exchange contracts(b)	$	—	$	—	$	488	$	(649)	$	(173)	$	(77)
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		38		55		38		57
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts	(7)		369		—		—		—		—
Hedged item	7		(369)		—		—		—		—
Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts	—		—		468		(501)		—		—
Amount excluded from effectiveness testing and amortized into earnings(c)	—		—		52		181		109		154
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d)
Foreign currency short-term borrowings	—		—		78		8		—		—
Foreign currency long-term debt	—		—		86		(183)		—		—
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts	(192)		178		—		—		—		—
All other net(c)	—		—		1		12		1		(1)
	$	(192)	$	178	$	1,210	$	(1,077)	$	(25)	$	133

(a)OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the consolidated statements of income. OCI = Other comprehensive income/(loss), included in the consolidated statements of comprehensive income.

(b)The amounts reclassified from OCI into COS were:

•a net loss of $89 million in 2021; and

•a net gain of $172 million in 2020 (including a gain of $22 million reported in Discontinued operations––net of tax).

The remaining amounts were reclassified from OCI into OID. Based on year-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax gain of $362 million within the next 12 months into income. The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 21 years and relates to foreign currency debt.

(c)The amounts reclassified from OCI were reclassified into OID.

(d)Short-term borrowings and long-term debt include foreign currency borrowings which are used as net investment hedges. The short-term borrowings carrying value as of December 31, 2021 was $1.1 billion. The long-term debt carrying values as of December 31, 2021 and December 31, 2020 were $844 million and $2.1 billion, respectively.

Schedule of Amounts Recorded In Balance Sheet Related to Cumulative Adjustments for Fair Value Hedges

The following summarizes cumulative basis adjustments to our long-term debt in fair value hedges:
	As of December 31, 2021						As of December 31, 2020
			Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount						Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount
(MILLIONS)	Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships		Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships
Long-term debt	$	2,233	$	16	$	1,154	$	2,016	$	117	$	1,149

(a)Carrying amounts exclude the cumulative amount of fair value hedging adjustments.

Schedule of Amounts Recorded In Balance Sheet Related to Cumulative Adjustments for Cash Flow Hedges

The following summarizes cumulative basis adjustments to our long-term debt in fair value hedges:
	As of December 31, 2021						As of December 31, 2020
			Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount						Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount
(MILLIONS)	Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships		Carrying Amount of Hedged Assets/Liabilities(a)		Active Hedging Relationships		Discontinued Hedging Relationships
Long-term debt	$	2,233	$	16	$	1,154	$	2,016	$	117	$	1,149

(a)Carrying amounts exclude the cumulative amount of fair value hedging adjustments.