FAIR VALUE

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. Various valuation approaches can be used to determine fair value, each requiring different valuation inputs. The following hierarchy classifies the inputs used to determine fair value into three levels:


•	Level 1 – quoted prices in active markets for identical assets or liabilities;


•	Level 2 – inputs, other than quoted prices, observable by a marketplace participant either directly or indirectly; and


•	Level 3 – unobservable inputs significant to the fair value measurement.

We did not have any significant non-financial assets or liabilities measured at fair value on July 2, 2017, or December 31, 2016.

Our financial instruments include cash and equivalents and other investments, accounts receivable and payable, short- and long-term debt, and derivative financial instruments. The carrying values of cash and equivalents, accounts receivable and payable, and short-term debt on the unaudited Consolidated Balance Sheet approximate their fair value. The following tables present the fair values of our other financial assets and liabilities on July 2, 2017, and December 31, 2016, and the basis for determining their fair values:



	Carrying Value			Fair Value			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2) (b)
Financial Assets (Liabilities) (a)	July 2, 2017
Available-for-sale securities	$	171		$	171		$	55	$	116
Cash flow hedges	(343		)	(343		)	—		(343		)
Short- and long-term debt principal	(4,011		)	(3,975		)	—		(3,975		)

	December 31, 2016
Available-for-sale securities	$	177		$	177		$	59	$	118
Cash flow hedges	(477		)	(477		)	—		(477		)
Short- and long-term debt principal	(3,924		)	(3,849		)	—		(3,849		)

(a)We had no Level 3 financial instruments on July 2, 2017, or December 31, 2016.

(b)Determined under a market approach using valuation models that incorporate observable inputs such as interest rates, bond yields and quoted prices for similar assets and liabilities.