Hedging Activities and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2019

Derivative [Line Items]

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

The following table presents the contractual amounts of our derivative instruments outstanding:

(in millions)	FASB ASC Topic 815 Designation	As of
		June 30, 2019		December 31, 2018
Forward currency contracts	Cash flow hedge	$	4,269	$	3,962
Forward currency contracts	Net investment hedge	1,928		1,483
Forward currency contracts	Non-designated	7,921		5,880
Interest rate derivative contracts	Cash flow hedge	—		1,000
Total Notional Outstanding		$	14,118	$	12,326

Derivative Instruments, Gain (Loss) [Table Text Block]

	Effect of Hedging Relationships on Accumulated Other Comprehensive Income
	Amount Recognized in OCI on Derivative									Unaudited Condensed Consolidated Statements of Operations (1)			Amount Reclassified from AOCI into Earnings
(in millions)	Pre-Tax Gain (Loss)			Tax Benefit (Expense)			Gain (Loss) Net of Tax			Location of Amount Reclassified	Total Amount of Line Item Presented		Pre-Tax (Gain) Loss			Tax (Benefit) Expense			(Gain) Loss Net of Tax
Three Months Ended June 30, 2019
Forward currency contracts
Cash flow hedges	$	2		$	(1	)	$	2		Cost of products sold	$	758	$	(16	)	$	4		$	(12	)
Net investment hedges (2)	(5		)	1			(4		)	Interest expense	89		(10		)	2			(8		)
Interest rate derivative contracts
Cash flow hedges	—			—			—			Interest expense	89		1			—			1
Three Months Ended June 30, 2018
Forward currency contracts
Cash flow hedges	$	194		$	(44	)	$	151		Cost of products sold	$	739	$	10		$	(2	)	$	7
Net investment hedges (2)	21			(5		)	16			Interest expense	57		(7		)	2			(5		)
Six Months Ended June 30, 2019
Forward currency contracts
Cash flow hedges	$	75		$	(17	)	$	58		Cost of products sold	$	1,488	$	(25	)	$	6		$	(19	)
Net investment hedges (2)	28			(6		)	22			Interest expense	198		(21		)	5			(16		)
Interest rate derivative contracts
Cash flow hedges	—			—			—			Interest expense	198		2			—			1
Six Months Ended June 30, 2018
Forward currency contracts
Cash flow hedges	$	77		$	(17	)	$	59		Cost of products sold	$	1,411	$	25		$	(6	)	$	19
Net investment hedges (2)	21			(5		)	16			Interest expense	119		(7		)	2			(5		)

Derivative Instruments, Gain (Loss) that may be Reclassified from AOCI to Earnings within Twelve Months [Table Text Block]

As of June 30, 2019, pre-tax net gains or losses for our derivative instruments designated, or previously designated, as cash flow and net investment hedges under FASB ASC Topic 815 that may be reclassified from AOCI to earnings within the next twelve months are presented below (in millions):

Designated Derivative Instrument	FASB ASC Topic 815 Designation	Location on Unaudited Condensed Consolidated Statements of Operations	Amount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings
Forward currency contracts	Cash flow hedge	Cost of products sold	$	70
Forward currency contracts	Net investment hedge	Interest expense	48
Interest rate derivative contracts	Cash flow hedge	Interest expense	(5		)

Derivatives Not Designated as Hedging Instruments [Table Text Block]

Net gains and losses on currency hedge contracts not designated as hedging instruments offset by net gains and losses from currency transaction exposures are presented below:

	Location on Unaudited Condensed Consolidated Statements of Operations	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)		2019			2018			2019			2018
Net gain (loss) on currency hedge contracts (1)	Other, net	$	(152	)	$	32		$	(130	)	$	8
Net gain (loss) on currency transaction exposures	Other, net	(4		)	(33		)	2			(17		)
Net currency exchange gain (loss)		$	(156	)	$	(1	)	$	(127	)	$	(9	)

(1)

Certain of our non-designated forward currency contracts were entered into for the purpose of managing our exposure to currency exchange rate risk related to the purchase price of the proposed BTG Acquisition. We recognized a $151 million loss in the second quarter of 2019 and a $116 million loss in the first six months of 2019 in Net gain (loss) on currency hedge contracts due to changes in fair value of the contracts, which are recognized in earnings until contract settlement.

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following are the balances of our derivative assets and liabilities:

	Location on Unaudited Condensed Consolidated Balance Sheets (1)	As of
(in millions)		June 30, 2019		December 31, 2018
Derivative Assets:
Designated Derivative Instruments
Forward currency contracts	Other current assets	$	65	$	55
Forward currency contracts	Other long-term assets	253		183
		318		237
Non-Designated Derivative Instruments
Forward currency contracts	Other current assets	30		67
Total Derivative Assets		$	348	$	304
Derivative Liabilities:
Designated Derivative Instruments
Forward currency contracts	Other current liabilities	$	3	$	2
Forward currency contracts	Other long-term liabilities	9		3
Interest rate contracts	Other current liabilities	—		44
		11		49
Non-Designated Derivative Instruments
Forward currency contracts	Other current liabilities	116		31
Total Derivative Liabilities		$	128	$	80

(1)

We classify derivative assets and liabilities as current when the settlement date of the derivative contract is one year or less.

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

Assets and liabilities measured at fair value on a recurring basis consist of the following:

	As of
	June 30, 2019								December 31, 2018
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Money market and government funds	$	25	$	—	$	—	$	25	$	13	$	—	$	—	$	13
Publicly-held equity securities	1		—		—		1		—		—		—		—
Derivative instruments	—		348		—		348		—		304		—		304
	$	25	$	348	$	—	$	374	$	14	$	304	$	—	$	318
Liabilities
Derivative instruments	$	—	$	128	$	—	$	128	$	—	$	80	$	—	$	80
Contingent consideration	—		—		394		394		—		—		347		347
	$	—	$	128	$	394	$	522	$	—	$	80	$	347	$	427