Hedging Activities and Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2025

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Notional Amounts of Outstanding Derivative Positions

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

(in millions)	FASB ASC Topic 815 Designation	As of
		March 31, 2025		December 31, 2024
Forward currency contracts	Cash flow hedge	$	4,358	$	2,464
Forward currency contracts	Net investment hedge	1,341		741
Foreign currency-denominated debt(1)	Net investment hedge	997		997
Forward currency contracts	Non-designated	3,848		4,440
Total Notional Outstanding		$	10,543	$	8,642

(1) Foreign currency-denominated debt is the €900 million debt principal associated with our December 2027 Notes designated as a net investment hedge.

Derivative Instruments, Gain (Loss)

	Effect of Hedging Relationships on Accumulated Other Comprehensive Income
	Amount Recognized in OCI on Hedges						Unaudited 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 and Total Amount of Line Item			Pre-Tax (Gain) Loss		Tax (Benefit) Expense		(Gain) Loss Net of Tax
Three Months Ended March 31, 2025
Forward currency contracts
Cash flow hedges	$	(70)	$	16	$	(55)	Cost of products sold	$	1,453	$	(41)	$	9	$	(31)
Net investment hedges(2)	(17)		4		(13)		Interest expense	82		(5)		1		(4)
Foreign currency-denominated debt
Net investment hedges(3)	(38)		9		(30)		Other, net	34		—		—		—
Interest rate derivative contracts
Cash flow hedges	—		—		—		Interest expense	82		0		(0)		0

	Effect of Hedging Relationships on Accumulated Other Comprehensive Income
	Amount Recognized in OCI on Hedges						Unaudited 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 and Total Amount of Line Item			Pre-Tax (Gain) Loss		Tax (Benefit) Expense		(Gain) Loss Net of Tax
Three Months Ended March 31, 2024
Forward currency contracts
Cash flow hedges	$	76	$	(17)	$	59	Cost of products sold	$	1,209	$	(49)	$	11	$	(38)
Net investment hedges(2)	27		(6)		21		Interest expense	69		(4)		1		(3)
Foreign currency-denominated debt
Net investment hedges(3)	23		(5)		18		Other, net	(2)		—		—		—
Interest rate derivative contracts
Cash flow hedges	—		—		—		Interest Expense	69		1		(0)		0

(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.

(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 and prior periods, 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 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

As of March 31, 2025, 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):

	FASB ASC Topic 815 Designation	Location on Unaudited Consolidated Statements of Operations	Amount of Pre-Tax Gain (Loss) that may be Reclassified to Earnings
Designated Hedging Instrument
Forward currency contracts	Cash flow hedge	Cost of products sold	$	99
Forward currency contracts	Net investment hedge	Interest expense	29
Interest rate derivative contracts	Cash flow hedge	Interest expense	(1)

Derivatives Not Designated as Hedging

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 Consolidated Statements of Operations	Three Months Ended March 31,
(in millions)		2025		2024
Net gain (loss) on currency hedge contracts	Other, net	$	(42)	$	15
Net gain (loss) on currency transaction exposures	Other, net	42		(20)
Net currency exchange gain (loss)		$	(0)	$	(5)

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value

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

	Location on Unaudited Consolidated Balance Sheets(1)	As of
(in millions)		March 31, 2025		December 31, 2024
Derivative and Nonderivative Assets:
Designated Hedging Instruments
Forward currency contracts	Other current assets	$	122	$	149
Forward currency contracts	Other long-term assets	11		79
		133		228
Non-Designated Hedging Instruments
Forward currency contracts	Other current assets	99		156
Total Derivative and Nonderivative Assets		$	232	$	384
Derivative and Nonderivative Liabilities:
Designated Hedging Instruments
Forward currency contracts	Other current liabilities	$	12	$	1
Forward currency contracts	Other long-term liabilities	19		—
Foreign currency-denominated debt(2)	Long-term debt	969		930
		1,000		931
Non-Designated Hedging Instruments
Forward currency contracts	Other current liabilities	47		59
Total Derivative and Nonderivative Liabilities		$	1,047	$	990

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

(2) Foreign currency-denominated debt is the €900 million debt principal associated with our December 2027 Notes designated as a net investment hedge. A portion of this notional is subject to de-designation and re-designation based on changes in the underlying hedged item.

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

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

	As of
	March 31, 2025								December 31, 2024
(in millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total
Assets
Money market funds and time deposits	$	396	$	—	$	—	$	396	$	120	$	—	$	—	$	120
Publicly-held equity securities	17		—		—		17		19		—		—		19
Hedging instruments	—		232		—		232		—		384		—		384
Licensing arrangements	—		—		17		17		—		—		24		24
	$	413	$	232	$	17	$	662	$	139	$	384	$	24	$	547
Liabilities
Hedging instruments	$	—	$	1,047	$	—	$	1,047	$	—	$	990	$	—	$	990
Contingent consideration liability	—		—		214		214		—		—		171		171
Licensing arrangements	—		—		21		21		—		—		33		33
	$	—	$	1,047	$	235	$	1,282	$	—	$	990	$	203	$	1,194