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Fair Value Measurements (Tables) | 6 Months Ended
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Jul. 01, 2012
Fair Value Disclosures [Abstract] |
Summary of designated derivatives | The following table is a summary of the activity related to derivatives designated as hedges for the fiscal second quarters in 2012 and 2011:
|  | Gain/ (Loss) recognized in Accumulated OCI(1) |  | Gain/(Loss) reclassified from Accumulated OCI into income(1) |  | Gain/ (Loss) recognized in Other income/expense(2)
|  | Fiscal Second Quarters Ended
(Dollars in Millions) |  | 2012 |  | 2011 |  | 2012 |  | 2011 |  | 2012 |  | 2011
Cash Flow Hedges by Income Statement Caption |  |  |  |  |  |  |  |  |  |  |  |
Sales to customers(A) |  | $ | (42 | ) |  | — |  |  | (10 | ) |  | — |  |  | (1 | ) |  | — |
Cost of products sold(A) |  | (97 | ) |  | 12 |  |  | (13 | ) |  | (44 | ) |  | 1 |  |  | 6 |
Research and development expense(A) |  | 30 |  |  | 28 |  |  | 11 |  |  | 18 |  |  | — |  |  | (2 | )
Interest (income)/Interest expense, net(B) |  | (41 | ) |  | (31 | ) |  | (6 | ) |  | (16 | ) |  | — |  |  | — |
Other (income)expense, net(A) |  | 39 |  |  | (7 | ) |  | 9 |  |  | 2 |  |  | (1 | ) |  | — |
Total |  | $ | (111 | ) |  | 2 |  |  | (9 | ) |  | (40 | ) |  | (1 | ) |  | 4 |
The following table is a summary of the activity related to derivatives designated as hedges for the first fiscal six months in 2012 and 2011:
|  | Gain/ (Loss) recognized in Accumulated OCI(1) |  | Gain/ (Loss) reclassified from Accumulated OCI into income(1) |  | Gain/ (Loss) recognized in other income/expense(2)
|  | Fiscal Six Months Ended
(Dollars in Millions) |  | 2012 |  | 2011 |  | 2012 |  | 2011 |  | 2012 |  | 2011
Cash Flow Hedges by Income Statement Caption |  |  |  |  |  |  |  |  |  |  |  |
Sales to customers(A) |  | $ | (14 | ) |  | 27 |  |  | (30 | ) |  | (10 | ) |  | — |  |  | (2 | )
Cost of products sold(A) |  | (39 | ) |  | 92 |  |  | (34 | ) |  | (106 | ) |  | — |  |  | 3 |
Research and development expense(A) |  | 11 |  |  | (8 | ) |  | 13 |  |  | 19 |  |  | — |  |  | (2 | )
Interest (income)/Interest expense, net(B) |  | (42 | ) |  | (40 | ) |  | (9 | ) |  | (18 | ) |  | — |  |  | — |
Other (income)expense, net(A) |  | (1 | ) |  | (59 | ) |  | 8 |  |  | (3 | ) |  | (1 | ) |  | 2 |
Total |  | $ | (85 | ) |  | 12 |  |  | (52 | ) |  | (118 | ) |  | (1 | ) |  | 1 |
All amounts shown in the tables above are net of tax. (1) Effective portion (2) Ineffective portion (A) Foreign exchange contracts (B) Cross currency interest rate swaps
Financial assets and liabilities at fair value | The Company’s significant financial assets and liabilities measured at fair value as of July 1, 2012 and January 1, 2012 were as follows:
|  | July 1, 2012 |  |  |  | January 1, 2012
(Dollars in Millions) |  | Level 1 |  | Level 2 |  | Level 3 |  | Total |  | Total(1)
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | — |  |  | 449 |  |  | — |  |  | 449 |  |  | 442 |
Cross currency interest rate swaps(2) |  | — |  |  | 17 |  |  | — |  |  | 17 |  |  | 15 |
Total |  | — |  |  | 466 |  |  | — |  |  | 466 |  |  | 457 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | — |  |  | 403 |  |  | — |  |  | 403 |  |  | 452 |
Cross currency interest rate swaps(3) |  | — |  |  | 699 |  |  | — |  |  | 699 |  |  | 594 |
Total |  | — |  |  | 1,102 |  |  | — |  |  | 1,102 |  |  | 1,046 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |
Assets: |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | — |  |  | 22 |  |  | — |  |  | 22 |  |  | 29 |
Swiss Franc Option* |  | — |  |  | — |  |  | — |  |  | — |  |  | 17 |
Total |  | — |  |  | 22 |  |  | — |  |  | 22 |  |  | 46 |
Liabilities: |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | — |  |  | 41 |  |  | — |  |  | 41 |  |  | 34 |
Other Investments(4) |  | $ | 1,675 |  |  | — |  |  | — |  |  | 1,675 |  |  | 1,563 |
* Currency option related to the acquisition of Synthes, Inc., which expired in January 2012.
(1) | As of January 1, 2012, these assets and liabilities are classified as Level 2 with the exception of Other Investments of $1,563 million which are classified as Level 1.
(2) | Includes $14 million and $15 million of non-current assets for July 1, 2012 and January 1, 2012, respectively.
(3) | Includes $699 million and $594 million of non-current liabilities for July 1, 2012 and January 1, 2012, respectively.
(4) | Classified as non-current other assets.
Financial assets and liabilities not measured at fair value | Financial Instruments not measured at Fair Value: The following financial assets and liabilities are held at carrying amount on the consolidated balance sheet as of July 1, 2012:
(Dollars in Millions) |  | Carrying Amount |  |  | Estimated Fair Value |
Financial Assets |  |  |  |
Current Investments |  |  |  |
Cash |  | $ | 3,459 |  |  | 3,459 |
Government securities and obligations |  | 10,857 |  |  | 10,857 |
Corporate debt securities |  | 529 |  |  | 529 |
Money market funds |  | 1,620 |  |  | 1,620 |
Time deposits |  | 450 |  |  | 450 |
Total cash, cash equivalents and current marketable securities |  | $ | 16,915 |  |  | 16,915 |
Fair value of government securities and obligations and corporate debt securities was estimated using quoted broker prices and significant other observable inputs.
Financial Liabilities |  |  |  |
Current Debt |  | $ | 6,040 |  |  | 6,040 |
Non-Current Debt |  |  |  |
3 month LIBOR+0.09% FRN due 2014 |  | 750 |  |  | 750 |
1.20% Notes due 2014 |  | 999 |  |  | 1,014 |
2.15% Notes due 2016 |  | 898 |  |  | 950 |
5.55% Debentures due 2017 |  | 1,000 |  |  | 1,223 |
5.15% Debentures due 2018 |  | 898 |  |  | 1,091 |
4.75% Notes due 2019 (1B Euro 1.2434) |  | 1,237 |  |  | 1,475 |
3% Zero Coupon Convertible Subordinated Debentures due in 2020 |  | 203 |  |  | 194 |
2.95% Debentures due 2020 |  | 541 |  |  | 576 |
3.55% Notes due 2021 |  | 446 |  |  | 503 |
6.73% Debentures due 2023 |  | 250 |  |  | 345 |
5.50% Notes due 2024 (500 GBP 1.5539) |  | 772 |  |  | 993 |
6.95% Notes due 2029 |  | 294 |  |  | 436 |
4.95% Debentures due 2033 |  | 500 |  |  | 597 |
5.95% Notes due 2037 |  | 995 |  |  | 1,391 |
5.85% Debentures due 2038 |  | 700 |  |  | 958 |
4.50% Debentures due 2040 |  | 539 |  |  | 631 |
4.85% Notes due 2041 |  | 298 |  |  | 370 |
Other |  | 205 |  |  | 202 |
Total Non-Current Debt |  | $ | 11,525 |  |  | 13,699 |

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- Definition Tabular disclosure of the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments, assets, and liabilities. Such certain disclosures about the financial instruments, assets, and liabilities include: (1) the fair value of the required items together with their carrying amounts (as appropriate) and (2) the methodology and assumptions used in developing such estimates of fair value. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13433-108611 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6925170&loc=d3e19207-110258 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 14 -Subparagraph a -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 15 -Subparagraph b-d -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13476-108611 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 107 -Paragraph 10 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=6947722&loc=d3e13467-108611 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 45 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 159 -Paragraph 18 -Subparagraph c(2), d, e, f -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 157 -Paragraph 32 -Subparagraph a, c(1), c(2), c(3), d -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 159 -Paragraph 19 -Subparagraph a, b, c(1), d(1) -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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- Definition Tabular disclosure of the location and amount of gains and losses reported in the statement of financial performance, or when applicable, the statement of financial position. For example, (a) gains and losses recognized in the income statement on derivative instruments designated and qualifying as hedging instruments in fair value hedges and related hedged items designated and qualifying in fair value hedges and (b) gains and losses initially recognized in other comprehensive income on derivative instruments designated and qualifying as cash flow hedges. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 205G -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624171-113959 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5618551-113959 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44C -Subparagraph b -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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- Definition Tabular disclosure of the location and fair value amounts of derivative instruments (and nonderivative instruments that are designated and qualify as hedging instruments) reported in the statement of financial position. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5624163-113959 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 205G -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 133 -Paragraph 44C -Subparagraph a -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. + Details
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