v3.25.2
Financial Instruments
 6 Months Ended
Jun. 30, 2025
Fair Value Disclosures [Abstract]  
Financial Instruments Financial Instruments
Investments in Equity and Debt Securities
Our equity investments are accounted for using three different methods depending on the type of equity investment:
•Investments in companies over which we have significant influence but not a controlling interest are accounted for using the equity method, with our share of earnings or losses reported in other-net, (income) expense.
•For equity investments that do not have readily determinable fair values, we measure these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Any change in recorded value is recorded in other-net, (income) expense.
•Our public equity investments are measured and carried at fair value. Any change in fair value is recognized in other-net, (income) expense.
We adjust our equity investments without readily determinable fair values based upon changes in the equity instruments' values resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. Downward adjustments resulting from an impairment are recorded based upon impairment considerations, including the financial condition and near-term prospects of the issuer, general market conditions, and industry specific factors. Adjustments recorded for the three and six months ended June 30, 2025 and 2024 were not material.
The net gains (losses) recognized in our consolidated condensed statements of operations for equity securities were $114.0 million and $(32.8) million for the three and six months ended June 30, 2025, respectively, and $(157.9) million and $(141.9) million for the three and six months ended June 30, 2024, respectively. The net gains (losses) recognized for the three and six months ended June 30, 2025 and 2024 on equity securities sold during the respective periods were not material.
As of June 30, 2025, we had approximately $835 million of unfunded commitments to invest in venture capital funds, which we anticipate will be paid over a period of up to 10 years.
We record our available-for-sale debt securities at fair value, with changes in fair value reported as a component of accumulated other comprehensive income (loss). We periodically assess our investment in available-for-sale securities for impairment losses and credit losses. The amount of credit losses is determined by comparing the difference between the present value of future cash flows expected to be collected on these securities and the amortized cost. Factors considered in assessing credit losses include the position in the capital structure, vintage and amount of collateral, delinquency rates, current credit support, and geographic concentration. Impairment and credit losses related to available-for-sale securities were not material for the three and six months ended June 30, 2025 and 2024.
The table below summarizes the contractual maturities of our investments in debt securities measured at fair value as of June 30, 2025:
 Maturities by Period
TotalLess Than
1 Year		1-5
Years		6-10
Years		More Than
10 Years
Fair value of debt securities$673.1 $83.0 $201.9 $102.4 $285.8 
A summary of the amount of unrealized gains and losses in accumulated other comprehensive loss and the fair value of available-for-sale securities in an unrealized gain or loss position is as follows: 
June 30, 2025December 31, 2024
Unrealized gross gains$3.8 $1.6 
Unrealized gross losses32.2 43.2 
Fair value of securities in an unrealized gain position236.4 142.6 
Fair value of securities in an unrealized loss position396.8 491.2 
As of June 30, 2025, the available-for-sale securities in an unrealized loss position include primarily fixed-rate debt securities of varying maturities, which are sensitive to changes in the yield curve and other market conditions. Substantially all of the fixed-rate debt securities in a loss position are investment-grade debt securities. As of June 30, 2025, we do not intend to sell, and it is not more likely than not that we will be required to sell, the securities in a loss position before the market values recover or the underlying cash flows have been received, and there is no indication of a material default on interest or principal payments for our debt securities.
Realized gains and losses on sales of available-for-sale investments are computed based upon specific identification of the initial cost adjusted for any other-than-temporary declines in fair value that were recorded in earnings and were not material for the three and six months ended June 30, 2025 and 2024. Proceeds from sales of available-for-sale investments were $47.2 million and $88.8 million for the three and six months ended June 30, 2025, respectively, and $21.0 million and $45.4 million for the three and six months ended June 30, 2024, respectively.
Fair Value of Investments
The following table summarizes certain fair value information at June 30, 2025 and December 31, 2024 for investment assets measured at fair value on a recurring basis, as well as the carrying amount and amortized cost of certain other investments: 
   Fair Value Measurements Using 
Carrying
Amount
Cost(1)
Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant Other
Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Fair
Value
June 30, 2025
Cash equivalents(2)
$1,184.7 $1,184.7 $1,174.7 $10.0 $— $1,184.7 
Short-term investments:
U.S. government and agency securities$23.4 $23.7 $23.4 $— $— $23.4 
Corporate debt securities59.6 59.7 — 59.6 — 59.6 
Other securities87.1 87.1 — 19.6 67.5 87.1 
Short-term investments$170.1 
Noncurrent investments:
U.S. government and agency securities$132.4 $144.5 $132.4 $— $— $132.4 
Corporate debt securities209.8 218.2 — 209.8 — 209.8 
Mortgage-backed securities185.2 193.5 — 185.2 — 185.2 
Asset-backed securities62.7 62.9 — 62.7 — 62.7 
Other securities111.5 68.4 — 6.3 105.2 111.5 
Marketable equity securities420.4 451.2 420.4 — — 420.4 
Equity investments without readily determinable fair values(3)
897.0 
Equity method investments(3)
1,188.4 
Noncurrent investments$3,207.4 
December 31, 2024
Cash equivalents(2)
$1,506.9 $1,506.9 $1,494.1 $12.8 $— $1,506.9 
Short-term investments:
U.S. government and agency securities$29.2 $29.3 $29.2 $— $— $29.2 
Corporate debt securities65.3 65.4 — 65.3 — 65.3 
Asset-backed securities0.6 0.7 — 0.6 — 0.6 
Other securities59.7 59.7 — 16.7 43.0 59.7 
Short-term investments$154.8 
Noncurrent investments:
U.S. government and agency securities$140.2 $156.4 $140.2 $— $— $140.2 
Corporate debt securities211.4 225.0 — 211.4 — 211.4 
Mortgage-backed securities165.3 177.2 — 165.3 — 165.3 
Asset-backed securities56.7 57.5 — 56.7 — 56.7 
Other securities150.3 102.6 — 6.3 144.0 150.3 
Marketable equity securities485.5 494.6 485.5 — — 485.5 
Equity investments without readily determinable fair values(3)
863.8 
Equity method investments(3)
1,142.7 
Noncurrent investments$3,215.9 
(1) For available-for-sale debt securities, amounts disclosed represent the securities' amortized cost.
(2) We consider all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. The cost of these investments approximates fair value.
(3) Fair value disclosures are not applicable for equity method investments and investments accounted for under the measurement alternative for equity investments.
We determine our Level 1 and Level 2 fair value measurements based on a market approach using quoted market values, significant other observable inputs for identical or comparable assets or liabilities, or discounted cash flow analyses. Level 3 fair value measurements for other investment securities are determined using unobservable inputs, including the investments' cost adjusted for impairments and price changes from orderly transactions. Fair values are not readily available for certain equity investments measured under the measurement alternative.
Debt
In February 2025, we issued $1.00 billion of 4.550 percent fixed-rate notes due in 2028, $1.25 billion of 4.750 percent fixed-rate notes due in 2030, $1.00 billion of 4.900 percent fixed-rate notes due in 2032, $1.25 billion of 5.100 percent fixed-rate notes due in 2035, $1.25 billion of 5.500 percent fixed-rate notes due in 2055, and $750.0 million of 5.600 percent fixed-rate notes due in 2065, all with interest to be paid semi-annually. We used a portion of the net cash proceeds from this offering to fund the acquisition of Scorpion's PI3Kα inhibitor program STX-478 and related fees and expenses, with any remaining funds used for general business purposes, including the repayment of commercial paper.
In February 2024, we issued $6.50 billion aggregate principal amount of notes. We used the net cash proceeds from this offering for general business purposes, including the repayment of commercial paper, and the repayment of then-current maturities of long-term debt.
Fair Value of Debt
The following table summarizes certain fair value information for our short-term and long-term debt:
  Fair Value Measurements Using 
Carrying
Amount		Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant
Other Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Fair
Value
Short-term commercial paper borrowings
June 30, 2025$4,091.7 $— $4,083.6 $— $4,083.6 
December 31, 20244,337.6 — 4,319.4 — 4,319.4 
Long-term debt, including current portion
June 30, 202535,812.0 — 32,907.3 — 32,907.3 
December 31, 202429,306.7 — 26,249.0 — 26,249.0 
Risk Management and Related Financial Instruments
Financial instruments that potentially subject us to credit risk consist principally of trade receivables and interest-bearing investments. Wholesale distributors of our products account for a substantial portion of our trade receivables; collateral is generally not required. We seek to mitigate the risk associated with this concentration through our ongoing credit-review procedures and insurance. The majority of our cash is held by a few major financial institutions that have been identified as Global Systemically Important Banks (G-SIBs) by the Financial Stability Board. G-SIBs are subject to rigorous regulatory testing and oversight and must meet certain capital requirements. We monitor our exposures with these institutions and do not expect any of these institutions to fail to meet their obligations. In accordance with documented corporate risk-management policies, we monitor the amount of credit exposure to any one financial institution or corporate issuer based on the credit rating of our counterparty. We are exposed to credit-related losses in the event of nonperformance by counterparties to risk-management instruments but do not expect significant counterparties to fail to meet their obligations given their investment grade credit ratings.
We have entered into accounts receivable factoring agreements with financial institutions to sell certain of our non-U.S. accounts receivable. These transactions are accounted for as sales and result in a reduction in accounts receivable because the agreements transfer effective control over, and risk related to, the receivables to the buyers. We derecognized $477.2 million and $421.6 million of accounts receivable as of June 30, 2025 and December 31, 2024, respectively, under these factoring arrangements. The costs of factoring such accounts receivable as well as estimated credit losses were not material for the three and six months ended June 30, 2025 and 2024.
Our derivative activities are initiated within the guidelines of documented corporate risk-management policies and are intended to offset losses and gains on the assets, liabilities, and transactions being hedged. Management reviews the correlation and effectiveness of our derivatives on a quarterly basis.
For derivative instruments that are designated and qualify as fair value hedges, the derivative instrument is marked to market, with gains and losses recognized currently in income to offset the respective losses and gains recognized on the underlying exposure. For derivative instruments that are designated and qualify as cash flow hedges, gains and losses are reported as a component of accumulated other comprehensive income (loss) (see Note 11) and reclassified into earnings in the same period the hedged transaction affects earnings. For derivative and non-derivative instruments that are designated and qualify as net investment hedges, the foreign currency translation gains or losses due to spot rate fluctuations are reported as a component of accumulated other comprehensive income (loss) (see Note 11). Derivative contracts that are not designated as hedging instruments are recorded at fair value with the gain or loss recognized in earnings during the period of change.
We manage foreign currency exchange risk through the use of foreign currency debt, cross-currency interest rate swaps, and foreign currency forward contracts. Our foreign currency-denominated notes had carrying amounts of $6.80 billion and $6.03 billion as of June 30, 2025 and December 31, 2024, respectively, of which $6.03 billion and $5.34 billion have been designated as, and are effective as, hedges of net investments in certain of our foreign operations as of June 30, 2025 and December 31, 2024, respectively. At June 30, 2025, we had outstanding cross-currency interest rate swaps with notional amounts of 402.0 million Swiss francs swapping Swiss francs to U.S. dollars, with settlement dates ranging through 2028. Our cross-currency interest rate swaps have been designated as, and are effective as, cash flow hedges. At June 30, 2025, we had outstanding foreign currency forward contracts to sell 18.23 billion euro and to sell 4.95 billion Chinese yuan with settlement dates ranging through 2025, which have been designated as, and are effective as, hedges of net investments.
We may also enter into foreign currency forward or option contracts as economic hedges to manage exposures arising from subsidiary trade and loan payables and receivables denominated in foreign currencies (primarily the euro and Japanese yen). Foreign currency derivatives used for hedging are put in place using the same or like currencies and duration as the underlying exposures. These contracts are recorded at fair value with the gain or loss recognized in other–net, (income) expense. Forward contracts generally have maturities not exceeding 12 months. At June 30, 2025, our significant outstanding foreign currency forward commitments were as follows, all of which have settlement dates within 180 days:
June 30, 2025
PurchaseSell
CurrencyAmount
(in millions)		CurrencyAmount
(in millions)
Euro27,172.6U.S. dollars31,476.8
U.S. dollars8,105.6Euro7,009.8
U.S. dollars518.1British pounds378.2
U.S. dollars424.6Chinese yuan3,039.4
U.S. dollars341.0Japanese yen49,214.7

In the normal course of business, our operations are exposed to fluctuations in interest rates which can vary the costs of financing, investing, and operating. We seek to address a portion of these risks through a controlled program of risk management that includes the use of derivative financial instruments. The objective of controlling these risks is to limit the impact of fluctuations in interest rates on earnings. Our primary interest rate risk exposure results from changes in short-term U.S. dollar interest rates. In an effort to manage interest rate exposures, we strive to achieve an acceptable balance between fixed- and floating-rate debt and investment positions and may enter into interest rate swaps or collars to help maintain that balance.
Interest rate swaps or collars that convert our fixed-rate debt to a floating rate are designated as fair value hedges of the underlying instruments. Interest rate swaps or collars that convert floating-rate debt to a fixed rate are designated as cash flow hedges. Interest expense on the debt is adjusted to include the payments made or received under the swap agreements. Cash proceeds from or payments to counterparties resulting from the termination of interest rate swaps are classified as operating activities in our consolidated condensed statements of cash flows. At June 30, 2025, all of our total long-term debt is at a fixed rate. We have converted approximately 5 percent of our long-term fixed-rate notes to floating rates through the use of interest rate swaps.
We also may enter into forward-starting interest rate swaps and treasury locks, which we designate as cash flow hedges, as part of any anticipated future debt issuances in order to reduce the risk of cash flow volatility from future changes in interest rates. The change in fair value of these instruments is recorded as part of other comprehensive income (loss) (see Note 11) and, upon completion of a debt issuance and termination of the instrument, is amortized to interest expense over the life of the underlying debt. Cash proceeds or payments from the termination of these instruments are classified as operating activities in our consolidated condensed statements of cash flows.
The Effect of Risk-Management Instruments on the Consolidated Condensed Statements of Operations
The following effects of risk-management instruments were recognized in other–net, (income) expense:
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Fair value hedges:
Effect from hedged fixed-rate debt$15.8 $(2.3)$55.4 $(19.0)
Effect from interest rate contracts(15.8)2.3 (55.4)19.0 
Cash flow hedges:
Effective portion of losses on interest rate contracts reclassified from accumulated other comprehensive loss1.4 2.0 2.8 4.4 
Cross-currency interest rate swaps(48.9)3.3 (60.6)87.3 
Net (gains) losses on foreign currency exchange contracts not designated as hedging instruments(651.2)31.6 (638.7)34.0 
Total$(698.7)$36.9 $(696.5)$125.7 
During the three and six months ended June 30, 2025 and 2024, the amortization of losses related to the portion of our risk management hedging instruments, fair value hedges, and cash flow hedges that was excluded from the assessment of effectiveness was not material.
The Effect of Risk-Management Instruments on Other Comprehensive Income (Loss)
The effective portion of risk-management instruments that was recognized in other comprehensive income (loss) is as follows:
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Net investment hedges:
Foreign currency-denominated notes$(484.6)$42.0 $(688.2)$173.8 
Cross-currency interest rate swaps(1.3)2.3 (10.5)19.3 
Foreign currency forward contracts(965.4)32.7 (1,292.7)131.8 
Cash flow hedges:
Forward-starting interest rate swaps— — (24.8)77.4 
Cross-currency interest rate swaps2.6 1.9 (4.1)15.6 
During the three and six months ended June 30, 2025 and 2024, the amounts excluded from the assessment of hedge effectiveness recognized in other comprehensive income (loss) were not material. As of June 30, 2025, the amount of pre-tax gains or losses on cash flow hedges expected to be reclassified from accumulated other comprehensive income (loss) to other–net, (income) expense during the next 12 months is not material.
Fair Value of Risk-Management Instruments
The following table summarizes certain fair value information at June 30, 2025 and December 31, 2024 for risk management assets and liabilities measured at fair value on a recurring basis:
  Fair Value Measurements Using 
Carrying
Amount		Quoted Prices in Active Markets for Identical Assets
(Level 1)		Significant
Other Observable Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Fair
Value
June 30, 2025
Risk-management instruments:
Interest rate contracts designated as fair value hedges:
Other noncurrent assets$13.6 $— $13.6 $— $13.6 
Other current liabilities(2.1)— (2.1)— (2.1)
Other noncurrent liabilities(75.1)— (75.1)— (75.1)
Cross-currency interest rate contracts designated as cash flow hedges:
Other noncurrent assets107.2 — 107.2 — 107.2 
Foreign exchange contracts designated as net investment hedges:
Other receivables289.5 — 289.5 — 289.5 
Other current liabilities(915.4)— (915.4)— (915.4)
Foreign exchange contracts not designated as hedging instruments:
Other receivables494.9 — 494.9 — 494.9 
Other current liabilities(157.7)— (157.7)— (157.7)
Contingent consideration liabilities:
Other noncurrent liabilities(38.3)— — (38.3)(38.3)
December 31, 2024
Risk-management instruments:
Interest rate contracts designated as fair value hedges:
Other current liabilities$(2.0)$— $(2.0)$— $(2.0)
Other noncurrent liabilities(117.8)— (117.8)— (117.8)
Cross-currency interest rate contracts designated as net investment hedges:
Other receivables10.3 — 10.3 — 10.3 
Cross-currency interest rate contracts designated as cash flow hedges:
Other noncurrent assets50.7 — 50.7 — 50.7 
Foreign exchange contracts designated as hedging instruments:
Other receivables297.0 — 297.0 — 297.0 
Foreign exchange contracts not designated as hedging instruments:
Other receivables39.5 — 39.5 — 39.5 
Other current liabilities(93.4)— (93.4)— (93.4)
Contingent consideration liabilities:
Other noncurrent liabilities(32.3)— — (32.3)(32.3)
Risk-management instruments above are disclosed on a gross basis. There are various rights of setoff associated with certain of the risk-management instruments above that are subject to enforceable master netting arrangements or similar agreements. Although various rights of setoff and master netting arrangements or similar agreements may exist with the individual counterparties to the risk-management instruments above, individually, these financial rights are not material.
Contingent consideration liabilities relate to our liabilities arising in connection with the CVRs issued as a result of acquisitions of businesses. The fair values of the CVR liabilities were estimated using a discounted cash flow analysis and Level 3 inputs, including projections representative of a market participant's view of the expected cash payments associated with the agreed upon regulatory milestones based on probabilities of technical success, timing of the potential milestone events for the compounds, and estimated discount rates.