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Derivatives
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives Derivatives
Derivative Contracts
The following table provides the aggregate notional value of outstanding derivative contracts.
December 31,December 31,
(In millions)20242023
Notional amount
Cross-currency interest rate swaps designated as net investment hedge - euro$1,000 $1,000 
Cross-currency interest rate swaps designated as net investment hedge - Japanese yen4,650 4,650 
Cross-currency interest rate swaps designated as net investment hedge - Swiss franc2,500 2,500 
Currency exchange contracts1,588 1,567 
While certain derivatives are subject to netting arrangements with counterparties, the company does not offset derivative assets and liabilities within the balance sheet. The following tables present the fair value of derivative instruments in the accompanying balance sheets and statements of income.
 Fair value – assetsFair value – liabilities
 December 31,December 31,December 31,December 31,
(In millions)2024202320242023
Derivatives designated as hedging instruments
Cross-currency interest rate swaps$458 $5 $57 $287 
Derivatives not designated as hedging instruments
Currency exchange contracts2 3 2 3 
Total derivatives$460 $8 $59 $290 
 Gain/(loss) recognized
(In millions)202420232022
Fair value hedging relationships
Cross-currency interest rate swaps
Hedged long-term obligations - included in other income/(expense)$— $— $77 
Derivatives designated as hedging instruments - included in other income/(expense)— — (81)
Derivatives designated as cash flow hedges
Interest rate swaps
Amount reclassified from accumulated other comprehensive items to interest expense(3)(4)— 
Amount reclassified from accumulated other comprehensive items to other income/(loss)— (3)(3)
Financial instruments designated as net investment hedges
Foreign currency-denominated debt and other payables
Included in currency translation adjustment within other comprehensive income/(loss)686 (356)695 
Cross-currency interest rate swaps
Included in currency translation adjustment within other comprehensive income/(loss)682 (222)52 
Included in interest expense267 120 19 
Derivatives not designated as hedging instruments
Currency exchange contracts
Included in cost of product revenues21 1 6 
Included in other income/(expense)(16)(29)102 
Gains and losses recognized on currency exchange contracts and the interest rate swaps designated as fair value hedges are included in the accompanying statements of income together with the corresponding, offsetting losses and gains on the underlying hedged transactions.
The company uses foreign currency-denominated debt, certain foreign currency-denominated payables, and cross-currency interest rate swaps to partially hedge its net investments in foreign operations against adverse movements in exchange rates. A portion of the company’s euro-denominated senior notes, certain foreign currency-denominated payables, and its cross-currency interest rate swaps have been designated as, and are effective as, economic hedges of part of the net investment in a foreign operation. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments and certain foreign currency-denominated payables, and contract fair value changes on the cross-currency interest rate swaps, excluding interest accruals, are included in currency translation adjustment within other comprehensive items and shareholders’ equity.
See Note 1 and Note 3 for additional information on the company’s risk management objectives and strategies.