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Hedging Activities and Fair Value Measurements (Tables)
 9 Months Ended
Sep. 30, 2020
Derivative [Line Items]  
Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]
The following table presents the contractual amounts of our hedging instruments outstanding:
(in millions)FASB ASC Topic 815 DesignationAs of
September 30, 2020December 31, 2019
Forward currency contractsCash flow hedge$4,118 $3,891 
Forward currency contractsNet investment hedge991 953 
Foreign currency-denominated debt(1)
Net investment hedge894 997 
Forward currency contractsNon-designated4,283 4,377 
Total Notional Outstanding$10,286 $10,218 
(1)    The €900 million (approximately $1.000 billion) debt principal is a nonderivative instrument designated as a net investment hedge of our net investments in certain of our euro functional subsidiaries. We dedesignated a portion of the net investment hedges in the second and third quarters of 2020.
Derivative Instruments, Gain (Loss) [Table Text Block]
Effect of Hedging Relationships on Accumulated Other Comprehensive Income
Amount Recognized in OCI on HedgesUnaudited Condensed Consolidated Statements of Operations (1)Amount Reclassified from AOCI into Earnings
(in millions)Pre-Tax Gain (Loss)Tax Benefit (Expense)Gain (Loss) Net of TaxLocation of Amount Reclassified and Total Amount of Line ItemPre-Tax (Gain) LossTax (Benefit) Expense(Gain) Loss Net of Tax
Three Months Ended September 30, 2020
Forward currency contracts
Cash flow hedges$(64)$14 $(50)Cost of products sold$869 $(20)$4 $(15)
Net investment hedges (2)(21)5 (16)Interest expense86 (6)1 (5)
Foreign currency-denominated debt
Net investment hedges (3)(46)10 (36)Other, net(64)— — — 
Interest rate derivative contracts
Cash flow hedges— — — Interest expense86 1 — 1 
Three Months Ended September 30, 2019
Forward currency contracts
Cash flow hedges$101 $(23)$78 Cost of products sold$777 $(22)$5 $(17)
Net investment hedges (2)64 (14)50 Interest expense95 (12)3 (9)
Interest rate derivative contracts
Cash flow hedges— — — Interest Expense95 1 — 1 
Nine Months Ended September 30, 2020
Forward currency contracts
Cash flow hedges$47 $(11)$36 Cost of products sold$2,465 $(70)$16 $(55)
Net investment hedges (2)(4)(21)(25)Interest expense265 (18)4 (14)
Foreign currency-denominated debt
Net investment hedges (3)(44)13 (31)Other, net(9)— — — 
Interest rate derivative contracts
Cash flow hedges— — — Interest expense265 4 (1)3 
Nine Months Ended September 30, 2019
Forward currency contracts
Cash flow hedges$176 $(40)$136 Cost of products sold$2,265 $(47)$10 $(36)
Net investment hedges (2)92 (21)71 Interest expense294 (33)7 (25)
Interest rate derivative contracts
Cash flow hedges— — — Interest expense294 3 (1)2 
(1)    In all periods presented in the table above, the pre-tax (gain) loss amounts reclassified from AOCI to earnings represent the effect of the hedging relationships on earnings. All other amounts included in earnings related to hedging relationships were immaterial.
(2)    For our outstanding forward currency contracts designated as net investment hedges, the net gain or loss reclassified from AOCI to earnings as a reduction of Interest expense represents the straight-line amortization of the excluded component as calculated at the date of designation. This initial value of the excluded component has been excluded from the assessment of effectiveness in accordance with FASB ASC Topic 815. In the current period, we did not recognize any gains or losses on the components included in the assessment of hedge effectiveness in earnings.
(3)    For our outstanding euro-denominated debt principal designated as a net investment hedge, the change in fair value attributable to changes in the spot rate is recorded in the Foreign currency translation adjustment (CTA) component of OCI. No amounts were reclassified from AOCI to current period earnings.
Derivative Instruments, Gain (Loss) that may be Reclassified from AOCI to Earnings within Twelve Months [Table Text Block]
As of September 30, 2020, 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 Hedging InstrumentFASB ASC Topic 815 DesignationLocation on Unaudited Condensed Consolidated Statements of OperationsAmount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings
Forward currency contractsCash flow hedgeCost of products sold$79 
Forward currency contractsNet investment hedgeInterest expense17 
Interest rate derivative contractsCash flow hedgeInterest 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 OperationsThree Months Ended September 30,Nine Months Ended September 30,
(in millions)2020201920202019
Net gain (loss) on currency hedge contractsOther, net$29 $(202)$20 $(334)
Net gain (loss) on currency transaction exposuresOther, net(30)(4)(33)— 
Net currency exchange gain (loss)$(1)$(207)$(13)$(334)
Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block] The following are the balances of our derivative and nonderivative assets and liabilities:
 Location on Unaudited Condensed Consolidated Balance Sheets (1)As of
(in millions)September 30, 2020December 31, 2019
Derivative and Nonderivative Assets:   
Designated Hedging Instruments  
Forward currency contractsOther current assets$90 $72 
Forward currency contractsOther long-term assets179 216 
  270 288 
Non-Designated Hedging Instruments   
Forward currency contractsOther current assets56 33 
Total Derivative and Nonderivative Assets $325 $321 
Derivative and Nonderivative Liabilities:   
Designated Hedging Instruments  
Forward currency contractsOther current liabilities$6 $3 
Forward currency contractsOther long-term liabilities9 8 
Foreign currency-denominated debtOther long-term liabilities1,042 998 
  1,058 1,009 
Non-Designated Hedging Instruments   
Forward currency contractsOther current liabilities58 29 
Total Derivative and Nonderivative Liabilities $1,116 $1,037 
(1)    We classify derivative and nonderivative assets and liabilities as current when the settlement date of the 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
 September 30, 2020December 31, 2019
(in millions)Level 1Level 2Level 3TotalLevel 1Level 2Level 3Total
Assets        
Money market funds and time deposits$1,716 $— $— $1,716 $50 $— $— $50 
Publicly-held securities— — — — 1 — — 1 
Hedging instruments— 325 — 325 — 321 — 321 
Licensing arrangements— — 396 396 — — 518 518 
 $1,717 $325 $396 $2,438 $51 $321 $518 $890 
Liabilities        
Hedging instruments$— $1,116 $— $1,116 $— $1,037 $— $1,037 
Contingent consideration liability— — 214 214 — — 354 354 
Licensing arrangements— — 413 413 — — 571 571 
 $— $1,116 $627 $1,743 $— $1,037 $925 $1,963 
The recurring Level 3 fair value measurements of our licensing arrangements recognized in our unaudited condensed consolidated balance sheets as of September 30, 2020 include the following significant unobservable inputs:
Licensing ArrangementsFair Value as of September 30, 2020Valuation TechniqueUnobservable InputRangeWeighted Average (1)
Financial Asset$396 millionDiscounted Cash FlowDiscount Rate11 %-15%15%
Projected Year of Payment2020-20282024
Financial Liability$413 millionDiscounted Cash FlowDiscount Rate12 %-15%13%
Projected Year of Payment2020-20272024
(1)    Unobservable inputs relate to a single financial asset and liability. As such, unobservable inputs were not weighted by the relative fair value of the instruments. For projected year of payment, the amount represents the median of the inputs and is not a weighted average.
Changes in the fair value of our licensing arrangements' financial asset were as follows:
(in millions)
Balance as of December 31, 2019$518 
Proceeds from royalty rights(132)
Fair value adjustment (expense) benefit9 
Balance as of September 30, 2020$396 
Changes in the fair value of our licensing arrangements' financial liability were as follows:
(in millions)
Balance as of December 31, 2019$571 
Payments for royalty rights(165)
Fair value adjustment expense (benefit)7 
Balance as of September 30, 2020$413