Fair value measurement (Tables)

9 Months Ended

Sep. 30, 2018

Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis

The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions):



	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Fair value measurement as of September 30, 2018, using:							Total
Assets:
Interest-bearing securities:
U.S. Treasury notes	$	2,626	$	—	$	—	$	2,626
U.S. Treasury bills	5,376		—		—		5,376
Other government-related debt securities:
U.S.	—		109		—		109
Foreign and other	—		1,008		—		1,008
Corporate debt securities:
Financial	—		2,697		—		2,697
Industrial	—		2,578		—		2,578
Other	—		573		—		573
Residential-mortgage-backed securities	—		1,462		—		1,462
Other mortgage- and asset-backed securities	—		473		—		473
Money market mutual funds	8,955		—		—		8,955
Other short-term interest-bearing securities	—		3,561		—		3,561
Equity securities	217		—		—		217
Derivatives:
Foreign currency contracts	—		121		—		121
Cross-currency swap contracts	—		261		—		261
Total assets	$	17,174	$	12,843	$	—	$	30,017

Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	49	$	—	$	49
Cross-currency swap contracts	—		306		—		306
Interest rate swap contracts	—		310		—		310
Contingent consideration obligations	—		—		66		66
Total liabilities	$	—	$	665	$	66	$	731



	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)

Fair value measurement as of December 31, 2017, using:							Total
Assets:
Interest-bearing securities:
U.S. Treasury notes	$	8,242	$	—	$	—	$	8,242
Other government-related debt securities:
U.S.	—		223		—		223
Foreign and other	—		2,422		—		2,422
Corporate debt securities:
Financial	—		10,072		—		10,072
Industrial	—		9,670		—		9,670
Other	—		1,390		—		1,390
Residential-mortgage-backed securities	—		2,168		—		2,168
Other mortgage- and asset-backed securities	—		2,297		—		2,297
Money market mutual funds	3,245		—		—		3,245
Other short-term interest-bearing securities	—		1,440		—		1,440
Equity securities	149		—		—		149
Derivatives:
Foreign currency contracts	—		6		—		6
Cross-currency swap contracts	—		270		—		270
Interest rate swap contracts	—		10		—		10
Total assets	$	11,636	$	29,968	$	—	$	41,604

Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	204	$	—	$	204
Cross-currency swap contracts	—		220		—		220
Interest rate swap contracts	—		61		—		61
Contingent consideration obligations	—		—		69		69
Total liabilities	$	—	$	485	$	69	$	554

Changes in carrying amounts of contingent consideration obligations

Changes in the carrying amounts of contingent consideration obligations were as follows (in millions):



	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
Beginning balance	$	72		$	182		$	69		$	179
Addition from K-A acquisition	—			—			45			—
Net changes in valuations	(6		)	(114		)	(48		)	(111		)
Ending balance	$	66		$	68		$	66		$	68