Fair Value Measurements and Fair Value of Financial Instruments (Tables)

3 Months Ended

Mar. 30, 2019

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following tables present information about the company’s financial assets and liabilities measured at fair value on a recurring basis as of March 30, 2019 and December 31, 2018:



	March 30,		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	2019		(Level 1)		(Level 2)		(Level 3)

Assets
Cash equivalents	$	77	$	77	$	—	$	—
Bank time deposits	2		2		—		—
Investments in common stock, mutual funds and other similar instruments	19		19		—		—
Warrants	6		—		6		—
Insurance contracts	120		—		120		—
Derivative contracts	75		—		75		—

Total Assets	$	299	$	98	$	201	$	—

Liabilities
Derivative contracts	$	103	$	—	$	103	$	—
Contingent consideration	37		—		—		37

Total Liabilities	$	140	$	—	$	103	$	37



	December 31,		Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
(In millions)	2018		(Level 1)		(Level 2)		(Level 3)

Assets
Cash equivalents	$	769	$	769	$	—	$	—
Bank time deposits	2		2		—		—
Investments in mutual funds and other similar instruments	10		10		—		—
Warrants	8		—		8		—
Insurance contracts	113		—		113		—
Derivative contracts	31		—		31		—

Total Assets	$	933	$	781	$	152	$	—

Liabilities
Derivative contracts	$	145	$	—	$	145	$	—
Contingent consideration	37		—		—		37

Total Liabilities	$	182	$	—	$	145	$	37

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

he following table provides a rollforward of the fair value, as determined by level 3 inputs, of the contingent consideration.



	Three Months Ended
	March 30,		March 31,
(In millions)	2019		2018

Contingent Consideration
Beginning Balance	$	37	$	35
Acquisitions	—		11
Payments	—		(5		)

Ending Balance	$	37	$	41

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

he following table provides the aggregate notional value of outstanding derivative contracts.



	March 30,		December 31,
(In millions)	2019		2018

Notional Amount
Interest rate swaps (described in Note 8)	$	3,100	$	3,100
Cross-currency interest rate swaps - designated as net investment hedges	1,800		1,500
Currency exchange contracts	3,879		3,424

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]



	Fair Value – Assets				Fair Value – Liabilities
	March 30,		December 31,		March 30,		December 31,
(In millions)	2019		2018		2019		2018

Derivatives Designated as Hedging Instruments
Interest rate swaps (a)	$	—	$	—	$	100	$	129
Cross-currency interest rate swaps (b)	66		28		—		—
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts (c)	9		3		3		16

Total Derivatives	$	75	$	31	$	103	$	145


(a)	The fair value of the interest rate swaps is included in the consolidated balance sheet under the caption other long-term liabilities.


(b)	The fair value of the cross-currency interest rate swaps is included in the consolidated balance sheet under the caption other assets.


(c)	The fair value of the currency exchange contracts is included in the consolidated balance sheet under the captions other current assets or other accrued expenses.

The following amounts related to cumulative basis adjustments for fair value hedges were included in the consolidated balance sheet under the caption long-term obligations:



	Carrying Amount of the Hedged Liability				Cumulative Amount of Fair Value Hedging Adjustment - Increase (Decrease) Included in Carrying Amount of Liability (d)
	March 30,		December 31,		March 30,			December 31,
(In millions)	2019		2018		2019			2018

Long-term Obligations	$	3,317	$	3,291	$	(68	)	$	(93	)


(d)	Includes increases in the carrying amount of $27 million and $30 million at March 30, 2019 and December 31, 2018, respectively, on discontinued hedging relationships.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]



	Gain (Loss) Recognized
	Three Months Ended
	March 30,			March 31,
(In millions)	2019			2018

Fair Value Hedging Relationships
Interest rate swaps
Hedged long-term obligations - included in other expense, net	$	(28	)	$	42
Derivatives designated as hedging instruments - included in other expense, net	29			(38		)
Derivatives Designated as Cash Flow Hedges
Interest rate swaps
Amount reclassified from accumulated other comprehensive items to other expense, net	(3		)	(3		)
Derivatives Designated as Net Investment Hedges
Foreign currency-denominated debt
Included in currency translation adjustment within other comprehensive items	156			(200		)
Cross-currency interest rate swaps
Included in currency translation adjustment within other comprehensive items	37			—
Included in other expense, net	14			—
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts
Included in cost of product revenues	2			(2		)
Included in other expense, net	17			(8		)

Fair Value, by Balance Sheet Grouping [Table Text Block]

The carrying value and fair value of the company’s notes receivable and debt obligations are as follows:



	March 30, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(In millions)	Value		Value		Value		Value

Debt Obligations:
Senior notes	$	18,129	$	18,781	$	18,276	$	18,322
Commercial paper	—		—		693		693
Other	19		19		21		21

	$	18,148	$	18,800	$	18,990	$	19,036

The fair value of debt obligations was determined based on quoted market prices and on borrowing rates available to the company at the respective period ends which represent level 2 measurements.

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

The carrying value and fair value of the company’s notes receivable and debt obligations are as follows:



	March 30, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(In millions)	Value		Value		Value		Value

Debt Obligations:
Senior notes	$	18,129	$	18,781	$	18,276	$	18,322
Commercial paper	—		—		693		693
Other	19		19		21		21

	$	18,148	$	18,800	$	18,990	$	19,036

The fair value of debt obligations was determined based on quoted market prices and on borrowing rates available to the company at the respective period ends which represent level 2 measurements.