v3.22.2.2
Financial Instruments (Tables)
 9 Months Ended
Oct. 02, 2022
Fair Value Disclosures [Abstract]  
Schedule of Financial Assets and Liabilities Measured At Fair Value On a Recurring Basis
Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy, using a Market Approach:
October 2, 2022December 31, 2021
(MILLIONS)TotalLevel 1Level 2TotalLevel 1Level 2
Financial assets:
Short-term investments
Equity securities with readily determinable fair values:
Money market funds$12,154 $— $12,154 $5,365 $— $5,365 
Available-for-sale debt securities:
Government and agency—non-U.S.
15,885 — 15,885 17,318 — 17,318 
Government and agency—U.S.
2,931 — 2,931 4,050 — 4,050 
Corporate and other
1,361 — 1,361 647 — 647 
20,176 — 20,176 22,014 — 22,014 
Total short-term investments32,330 — 32,330 27,379 — 27,379 
Other current assets
Derivative assets:
Interest rate contracts
9 — 9 4 — 4 
Foreign exchange contracts
1,950 — 1,950 704 — 704 
Total other current assets1,959 — 1,959 709 — 709 
Long-term investments
Equity securities with readily determinable fair values(a)
2,972 2,960 12 3,876 3,849 27 
Available-for-sale debt securities:
Government and agency—non-U.S.
285 — 285 465 — 465 
Government and agency—U.S.
— — — 6 — 6 
Corporate and other
73 — 73 50 — 50 
358 — 358 521 — 521 
Total long-term investments3,330 2,960 370 4,397 3,849 548 
Other noncurrent assets
Derivative assets:
Interest rate contracts
— — — 16 — 16 
Foreign exchange contracts
812 — 812 242 — 242 
Total derivative assets812 — 812 259 — 259 
Insurance contracts(b)
631 — 631 808 — 808 
Total other noncurrent assets1,444 — 1,444 1,067 — 1,067 
Total assets$39,063 $2,960 $36,103 $33,552 $3,849 $29,703 
Financial liabilities:
Other current liabilities
Derivative liabilities:
Foreign exchange contracts
$295 $— $295 $476 $— $476 
Total other current liabilities295 — 295 476 — 476 
Other noncurrent liabilities
Derivative liabilities:
Interest rate contracts330 — 330 — — — 
Foreign exchange contracts
1,153 — 1,153 405 — 405 
Total other noncurrent liabilities1,482 — 1,482 405 — 405 
Total liabilities$1,777 $— $1,777 $881 $— $881 
(a)Long-term equity securities of $139 million as of October 2, 2022 and $194 million as of December 31, 2021 were held in restricted trusts for U.S. non-qualified employee benefit plans.
(b)Includes life insurance policies held in restricted trusts for U.S. non-qualified employee benefit plans. The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions—net (see Note 4).
Investments by Classification Type
The following summarizes our investments by classification type:
(MILLIONS)October 2, 2022December 31, 2021
Short-term investments
Equity securities with readily determinable fair values(a)
$12,154 $5,365 
Available-for-sale debt securities20,176 22,014 
Held-to-maturity debt securities2,495 1,746 
Total Short-term investments$34,825 $29,125 
Long-term investments
Equity securities with readily determinable fair values(b)
$2,972 $3,876 
Available-for-sale debt securities358 521 
Held-to-maturity debt securities36 34 
Private equity securities at cost(b)
696 623 
Total Long-term investments$4,062 $5,054 
Equity-method investments9,826 16,472 
Total long-term investments and equity-method investments$13,888 $21,526 
Held-to-maturity cash equivalents$969 $268 
(a)Includes money market funds primarily invested in U.S. Treasury and government debt.
(b)Represent investments in the life sciences sector.
Schedule of Held-to-maturity Securities
At October 2, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
October 2, 2022December 31, 2021
Gross UnrealizedMaturities (in Years)Gross Unrealized
(MILLIONS)Amortized CostGainsLossesFair ValueWithin 1Over 1
to 5		Over 5Amortized CostGainsLossesFair Value
Available-for-sale debt securities
Government and agency––non-U.S.
$16,711 $26 $(567)$16,169 $15,885 $285 $— $18,032 $13 $(263)$17,783 
Government and agency––U.S.
2,932 — (1)2,931 2,931 — — 4,056 — (1)4,055 
Corporate and other1,446 — (12)1,434 1,361 73 — 698 — (1)697 
Held-to-maturity debt securities
Time deposits and other
1,557 — — 1,557 1,525 20 12 947 — — 947 
Government and agency––non-U.S.
1,943 — — 1,943 1,939 3 1 1,102 — — 1,102 
Total debt securities$24,589 $26 $(580)$24,034 $23,641 $381 $13 $24,835 $14 $(265)$24,584 
Schedule of Available-for-sale Securities
At October 2, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
October 2, 2022December 31, 2021
Gross UnrealizedMaturities (in Years)Gross Unrealized
(MILLIONS)Amortized CostGainsLossesFair ValueWithin 1Over 1
to 5		Over 5Amortized CostGainsLossesFair Value
Available-for-sale debt securities
Government and agency––non-U.S.
$16,711 $26 $(567)$16,169 $15,885 $285 $— $18,032 $13 $(263)$17,783 
Government and agency––U.S.
2,932 — (1)2,931 2,931 — — 4,056 — (1)4,055 
Corporate and other1,446 — (12)1,434 1,361 73 — 698 — (1)697 
Held-to-maturity debt securities
Time deposits and other
1,557 — — 1,557 1,525 20 12 947 — — 947 
Government and agency––non-U.S.
1,943 — — 1,943 1,939 3 1 1,102 — — 1,102 
Total debt securities$24,589 $26 $(580)$24,034 $23,641 $381 $13 $24,835 $14 $(265)$24,584 
Contractual Maturities of Available-for-sale and Held-to-maturity Debt Securities
At October 2, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
October 2, 2022December 31, 2021
Gross UnrealizedMaturities (in Years)Gross Unrealized
(MILLIONS)Amortized CostGainsLossesFair ValueWithin 1Over 1
to 5		Over 5Amortized CostGainsLossesFair Value
Available-for-sale debt securities
Government and agency––non-U.S.
$16,711 $26 $(567)$16,169 $15,885 $285 $— $18,032 $13 $(263)$17,783 
Government and agency––U.S.
2,932 — (1)2,931 2,931 — — 4,056 — (1)4,055 
Corporate and other1,446 — (12)1,434 1,361 73 — 698 — (1)697 
Held-to-maturity debt securities
Time deposits and other
1,557 — — 1,557 1,525 20 12 947 — — 947 
Government and agency––non-U.S.
1,943 — — 1,943 1,939 3 1 1,102 — — 1,102 
Total debt securities$24,589 $26 $(580)$24,034 $23,641 $381 $13 $24,835 $14 $(265)$24,584 
Schedule of Gains and Losses on Investment Securities
The following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity-method investments, held at the reporting date:
Three Months EndedNine Months Ended
(MILLIONS)October 2,
2022		October 3,
2021		October 2,
2022		October 3,
2021
Net (gains)/losses recognized during the period on equity securities(a)
$112 $(400)$1,353 $(1,601)
Less: Net (gains)/losses recognized during the period on equity securities sold during the period(5)(78)(84)(83)
Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date(b)
$116 $(322)$1,436 $(1,518)
(a)Reported in Other (income)/deductions––net. See Note 4.
(b)Included in net unrealized (gains)/losses are observable price changes on equity securities without readily determinable fair values. As of October 2, 2022, there were cumulative impairments and downward adjustments of $148 million and upward adjustments of $201 million. Impairments, downward and upward adjustments were not significant in the third quarter and first nine months of 2022 and 2021.
Schedule of Short-term Borrowings
Short-term borrowings include:
(MILLIONS)October 2,
2022		December 31, 2021
Current portion of long-term debt, principal amount$2,550 $1,636 
Other short-term borrowings, principal amount(a)
1,474 605 
Total short-term borrowings, principal amount
4,024 2,241 
Net fair value adjustments related to hedging and purchase accounting16 — 
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted
$4,040 $2,241 
(a)Primarily includes cash collateral. See Note 7F.
Schedule of Principal Amounts of Senior Unsecured Long-Term Debt and Adjustments
The following summarizes the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:
(MILLIONS)October 2,
2022		December 31, 2021
Total long-term debt, principal amount$31,831 $34,948 
Net fair value adjustments related to hedging and purchase accounting976 1,438 
Net unamortized discounts, premiums and debt issuance costs(178)(195)
Other long-term debt— 4 
Total long-term debt, carried at historical proceeds, as adjusted$32,629 $36,195 
Schedule of Derivative Instruments
The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
October 2, 2022December 31, 2021
Fair ValueFair Value
(MILLIONS)NotionalAssetLiabilityNotionalAssetLiability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)
$33,274 $2,479 $1,175 $29,576 $787 $717 
Interest rate contracts2,250 9 330 2,250 21 — 
2,488 1,505 808 717 
Derivatives not designated as hedging instruments:
Foreign exchange contracts$26,426 283 273 $21,419 160 164 
Total$2,771 $1,777 $968 $881 
(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.5 billion as of October 2, 2022 and $4.8 billion as of December 31, 2021.
Schedule of Derivative Assets
The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
October 2, 2022December 31, 2021
Fair ValueFair Value
(MILLIONS)NotionalAssetLiabilityNotionalAssetLiability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)
$33,274 $2,479 $1,175 $29,576 $787 $717 
Interest rate contracts2,250 9 330 2,250 21 — 
2,488 1,505 808 717 
Derivatives not designated as hedging instruments:
Foreign exchange contracts$26,426 283 273 $21,419 160 164 
Total$2,771 $1,777 $968 $881 
(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.5 billion as of October 2, 2022 and $4.8 billion as of December 31, 2021.
Schedule of Derivative Liabilities
The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
October 2, 2022December 31, 2021
Fair ValueFair Value
(MILLIONS)NotionalAssetLiabilityNotionalAssetLiability
Derivatives designated as hedging instruments:
Foreign exchange contracts(a)
$33,274 $2,479 $1,175 $29,576 $787 $717 
Interest rate contracts2,250 9 330 2,250 21 — 
2,488 1,505 808 717 
Derivatives not designated as hedging instruments:
Foreign exchange contracts$26,426 283 273 $21,419 160 164 
Total$2,771 $1,777 $968 $881 
(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.5 billion as of October 2, 2022 and $4.8 billion as of December 31, 2021.
Information about Gains/(Losses) Incurred to Hedge or Offset Operational Foreign Exchange or Interest Rate Risk
The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures (including those reported as part of discontinued operations):
 
Gains/(Losses)
Recognized in OID(a)
Gains/(Losses)
Recognized in OCI(a)
Gains/(Losses)
Reclassified from
OCI into OID and COS(a)
Three Months Ended
(MILLIONS)October 2,
2022		October 3,
2021		October 2,
2022		October 3,
2021		October 2,
2022		October 3,
2021
Derivative Financial Instruments in Cash Flow Hedge Relationships:
Foreign exchange contracts(b)
$— $— $528 $204 $558 $(59)
Amount excluded from effectiveness testing and amortized into earnings(c)
— — 61 10 57 10 
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts
(124)(5)— — — — 
Hedged item
124 5 — — — — 
Derivative Financial Instruments in Net Investment Hedge Relationships:      
Foreign exchange contracts
— — 680 177 — — 
Amount excluded from effectiveness testing and amortized into earnings(c)
— — 78 19 32 26 
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d)
      
Foreign currency short-term borrowings— — — 25 — — 
Foreign currency long-term debt— — 49 19 — — 
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts
(420)(74)— — — — 
All other net(c)
— — — — — — 
 $(420)$(74)$1,396 $453 $647 $(21)
Gains/(Losses)
Recognized in OID(a)
Gains/(Losses)
Recognized in OCI(a)
Gains/(Losses)
Reclassified from
OCI into OID and COS(a)
Nine Months Ended
(MILLIONS)October 2,
2022		October 3,
2021		October 2,
2022		October 3,
2021		October 2,
2022		October 3,
2021
Derivative Financial Instruments in Cash Flow Hedge Relationships:      
Foreign exchange contracts(b)
$— $— $1,339 $147 $872 $(314)
Amount excluded from effectiveness testing and amortized into earnings(c)
— — 105 31 100 28 
Derivative Financial Instruments in Fair Value Hedge Relationships:
Interest rate contracts
(346)(6)— — — — 
Hedged item
346 6 — — — — 
Derivative Financial Instruments in Net Investment Hedge Relationships:
Foreign exchange contracts
— — 1,613 332 — — 
Amount excluded from effectiveness testing and amortized into earnings(c)
— — 63 54 95 82 
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d)
Foreign currency short-term borrowings— — 26 52 — — 
Foreign currency long-term debt— — 119 66 — — 
Derivative Financial Instruments Not Designated as Hedges:
Foreign exchange contracts
(832)(97)— — — — 
All other net(c)
— — — 1 — 1 
$(832)$(97)$3,264 $683 $1,068 $(204)
(a)OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income.
(b)The amounts reclassified from OCI into COS were:
•a net gain of $125 million in the third quarter of 2022;
•a net gain of $227 million in the first nine months of 2022;
•a net loss of $18 million in the third quarter of 2021; and
•a net loss of $94 million in the first nine months of 2021.
The remaining amounts were reclassified from OCI into OID. Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax gain of $1 billion within the next 12 months into income. The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 21 years and relates to foreign currency debt.
(c)The amounts reclassified from OCI were reclassified into OID.
(d)Short-term borrowings and long-term debt include foreign currency borrowings, which are used in net investment hedges. The related short-term borrowings’ carrying value as of December 31, 2021 was $1.1 billion. The related long-term debt carrying values as of October 2, 2022 and December 31, 2021 were $726 million and $844 million, respectively.
Schedule of Total Amount of Each Income and Expense Line in which Results of Fair Value Hedges are Recorded
The following summarizes cumulative basis adjustments to our debt in fair value hedges:
October 2, 2022December 31, 2021
Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to
Carrying Amount		Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to
Carrying Amount
(MILLIONS)
Carrying Amount of Hedged Assets/Liabilities(a)
Active Hedging RelationshipsDiscontinued Hedging Relationships
Carrying Amount of Hedged Assets/Liabilities(a)
Active Hedging RelationshipsDiscontinued Hedging Relationships
Short-term borrowings, including current portion of long-term debt$— $— $16 $— $— $— 
Long-term debt$2,235 $(330)$1,061 $2,233 $16 $1,154 
(a)Carrying amounts exclude the cumulative amount of fair value hedging adjustments.