v3.25.4
FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Tables)
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Schedule of Financial Assets and Liabilities Measured at Fair Value
Financial assets and liabilities measured at fair value on a recurring basis are summarized below:
December 31, 2025December 31, 2024
Dollars in millionsLevel 1Level 2Level 3Level 1Level 2Level 3
Cash and cash equivalents
Money market and other securities$— $6,891 $— $— $6,559 $— 
Marketable debt securities
Certificates of deposit— 350 — — 308 — 
Corporate debt securities— 439 — — 486 — 
U.S. Treasury securities— 71 — — 39 — 
Derivative assets— 303 — — 750 — 
Equity investments552 — 85 247 42 — 
Derivative liabilities— 123 — — 247 — 
Contingent consideration liability
Contingent value rights(a)
3 — 607 2 — 256 
(a)    Includes the fair value of contingent value rights associated with the Mirati acquisition as further described in "—Note 4. Acquisitions, Divestitures, Licensing and Other Arrangements." The fair value of the contingent value rights was estimated using a probability-weighted expected return method and was based on significant unobservable inputs, including the discount rate and estimated probability and timing of achieving the specified regulation milestone. During 2025, the change in fair value of $351 million reflected revised assumptions primarily related to the probability of achieving the specified regulatory milestone and was recorded within Other (income)/expense, net.
Summary of Equity Investments Carrying Amount
The following summarizes the carrying amount of equity investments:
December 31,
Dollars in millions20252024
Equity investments with RDFV
$552 $289 
Equity investments without RDFV
806 863 
Limited partnerships and other investments
738 598 
Total equity investments$2,096 $1,750 
Schedule of Equity Investments
The following summarizes the activity related to equity investments. Changes in fair value of equity investments are included in Other (income)/expense, net.
Year ended December 31,
Dollars in millions202520242023
Equity investments with RDFV
Net (gains)/losses recognized
$(291)$41 $117 
Less: net (gains)/losses recognized on investments sold
(4)32 (3)
Net unrealized (gains)/losses recognized on investments still held
(287)9 120 
Equity investments without RDFV
Upward adjustments(15)(36)(9)
Net realized (gains)/losses recognized on investments sold
(17)(39)— 
Impairments and downward adjustments89 62 14 
Limited partnerships and other investments
Equity in net (income)/loss of affiliates
(47)(44)38 
Total equity investment (gains)/losses
(280)(16)160 
Summary of Fair Value of Outstanding Derivatives
The following table summarizes the fair values and the notional values of outstanding derivatives:
 December 31, 2025December 31, 2024
Asset(a)
Liability(b)
Asset(a)
Liability(b)
Dollars in millionsNotionalFair ValueNotionalFair ValueNotionalFair ValueNotionalFair Value
Designated as cash flow hedges
Foreign currency exchange contracts
$5,074 $145 $1,542 $(64)$6,428 $424 $43 $— 
Cross-currency swap contracts584 65 — — 584 26 626 (30)
Designated as net investment hedges
Foreign currency exchange contracts
— — — — 185 17 — — 
Cross-currency swap contracts362 39 345 (48)361 23 346 (7)
Designated as fair value hedges
Interest rate swap contracts4,000 46 555 (5)1,500 10 1,955 (20)
Not designated as hedges
Foreign currency exchange contracts1,887 8 667 (5)5,749 250 5,243 (173)
Total return swap contracts(c)
— — 447 (1)— — 443 (17)
(a)    Included in Other current assets and Other non-current assets.
(b)    Included in Other current liabilities and Other non-current liabilities.
(c)    Total return swap contracts hedge changes in fair value of certain deferred compensation liabilities.
Derivative Instruments
The following table summarizes the financial statement classification and amount of (gains)/losses recognized on hedges:
Year Ended December 31,
202520242023
Dollars in millionsCost of products soldOther (income)/expense, netCost of products soldOther (income)/expense, netCost of products soldOther (income)/expense, net
Interest rate swap contracts$— $(1)$— $11 $— $(5)
Cross-currency swap contracts— (135)— 67 — (65)
Foreign exchange contracts63 43 (100)(98)(303)(95)
Forward interest rate contracts
— (35)— (5)— — 
The following table summarizes the effect of derivative and non-derivative instruments designated as hedges in Other comprehensive income/(loss):
Year Ended December 31,
Dollars in millions202520242023
Derivatives designated as cash flow hedges
Foreign exchange contracts gains/(losses):
Recognized in Other comprehensive income/(loss)$(426)$418 $13 
Reclassified to Cost of products sold63 (100)(303)
Cross-currency swap contracts gains/(losses):
Recognized in Other comprehensive income/(loss)85 (54)57 
Reclassified to Other (income)/expense, net(123)75 (31)
Forward interest rate contract gains/(losses):
Recognized in Other comprehensive income/(loss)— 131 — 
Reclassified to Other (income)/expense, net(28)(5)— 
Derivatives designated as net investment hedges
Cross-currency swap contracts gains/(losses):
Recognized in Other comprehensive income/(loss)(24)51 52 
Foreign exchange contracts gains/(losses):
Recognized in Other comprehensive income/(loss)(113)35 (15)
Non-derivatives designated as net investment hedges
Non-U.S. dollar borrowings gains/(losses):
Recognized in Other comprehensive income/(loss)(a)
— — (10)
(a) In 2023, the Company de-designated its remaining net investment hedge in debt denominated in euros of €375 million, and the amount represents the effective portion of foreign exchange loss on the remeasurement of the debt.