Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2016

Gains (losses) recognized in earnings for derivatives designed as hedging instruments

The following presents the effect of our derivative instruments designated as cash flow hedges under Topic 815 on our accompanying unaudited condensed consolidated statements of operations during the first quarter of 2016 and 2015 (in millions):



	Amount of Pre-tax Gain (Loss) Recognized in OCI (Effective Portion)		Amount of Pre-tax Gain (Loss) Reclassified from AOCI into Earnings (Effective Portion)		Location in Statement of Operations
Three Months Ended March 31, 2016
Currency hedge contracts	$	59	$	48	Cost of products sold
	$	59	$	48
Three Months Ended March 31, 2015
Currency hedge contracts	$	93	$	49	Cost of products sold
	$	93	$	49

Gains (losses) recognized in earnings for derivatives not designated as hedging instruments

The amount of gain (loss) recognized in earnings related to the ineffective portion of hedging relationships was immaterial for all periods presented.

Net foreign currency gain (loss) [Table Text Block]

Net gains and losses on currency hedge contracts not designated as hedging instruments were offset by net losses and gains from foreign currency transaction exposures, as shown in the following table:



in millions	Location in Statement of Operations	Three Months Ended
		March 31,
		2016			2015
Gain (loss) on currency hedge contracts	Other, net	$	(39	)	$	23
Gain (loss) on foreign currency transaction exposures	Other, net	34			(33		)
Net foreign currency gain (loss)	Other, net	$	(5	)	$	(10	)

Classification of derivative assets and liabilities within level 2

The following are the balances of our derivative assets and liabilities as of March 31, 2016 and December 31, 2015:



		As of
		March 31,		December 31,
(in millions)	Location in Balance Sheet (1)	2016		2015
Derivative Assets:
Currently or Previously Designated Hedging Instruments
Currency hedge contracts	Other current assets	$	101	$	138
Currency hedge contracts	Other long-term assets	34		66
		135		204
Non-Designated Hedging Instruments
Currency hedge contracts	Other current assets	29		33
Total Derivative Assets		$	164	$	237

Derivative Liabilities:
Currently or Previously Designated Hedging Instruments
Currency hedge contracts	Other current liabilities	$	6	$	1
Currency hedge contracts	Other long-term liabilities	22		—
		28		1
Non-Designated Hedging Instruments
Currency hedge contracts	Other current liabilities	62		22
Total Derivative Liabilities		$	90	$	23


(1)	We classify derivative assets and liabilities as current when the remaining term of the derivative contract is one year or less.

Assets and liabilities measured at fair value on a recurring basis

Assets and liabilities measured at fair value on a recurring basis consist of the following as of March 31, 2016 and December 31, 2015:



	March 31, 2016								As of December 31, 2015
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Money market and government funds	$	91	$	—	$	—	$	91	$	118	$	—	$	—	$	118
Currency hedge contracts	—		164		—		164		—		237		—		237
	$	91	$	164	$	—	$	255	$	118	$	237	$	—	$	355
Liabilities
Currency hedge contracts	$	—	$	90	$	—	$	90	$	—	$	23	$	—	$	23
Accrued contingent consideration	—		—		188		188		—		—		246		246
	$	—	$	90	$	188	$	278	$	—	$	23	$	246	$	269