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Fair Value Measurements (Tables)
 6 Months Ended
Jul. 02, 2023
Fair Value Disclosures [Abstract]  
Summary of Derivative Activity
The following table is a summary of the activity related to derivatives and hedges for the fiscal second quarters ended July 2, 2023 and July 3, 2022, net of tax:

July 2, 2023July 3, 2022
(Dollars in Millions)SalesCost of Products SoldR&D ExpenseInterest (Income) ExpenseOther (Income) ExpenseSalesCost of Products SoldR&D ExpenseInterest (Income) ExpenseOther (Income) Expense
The effects of fair value, net investment and cash flow hedging:
Gain (Loss) on fair value hedging relationship:
Interest rate swaps contracts:
    Hedged items$— — — (175)— — — — (241)— 
    Derivatives designated as hedging instruments— — — 175 — — — — 241 — 
Gain (Loss) on net investment hedging relationship:
Cross currency interest rate swaps contracts:
   Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing— — — 33 — — — — 44 — 
   Amount of gain or (loss) recognized in AOCI— — — 33 — — — — 44 — 
Gain (Loss) on cash flow hedging relationship:
Forward foreign exchange contracts:
   Amount of gain or (loss) reclassified from AOCI into income (15)56 (12)— 3 (17)(6)42 — (39)
   Amount of gain or (loss) recognized in AOCI (14)251 7 — 18 (25)35 69 — (38)
Cross currency interest rate swaps contracts:
   Amount of gain or (loss) reclassified from AOCI into income— — — 74 — — — — 102 — 
   Amount of gain or (loss) recognized in AOCI$— — — (432)— — — — 60 — 
The following table is a summary of the activity related to derivatives and hedges for the fiscal six months ended July 2, 2023 and July 3, 2022, net of tax:


July 2, 2023July 3, 2022
(Dollars in Millions)SalesCost of Products SoldR&D ExpenseInterest (Income) ExpenseOther (Income) ExpenseSalesCost of Products SoldR&D ExpenseInterest (Income) ExpenseOther (Income) Expense
The effects of fair value, net investment and cash flow hedging:
Gain (Loss) on fair value hedging relationship:
Interest rate swaps contracts:
 Hedged items$— — — (1,104)— — — — (772)— 
 Derivatives designated as hedging instruments— — — 1,104 — — — — 772 — 
Gain (Loss) on net investment hedging relationship:
Cross currency interest rate swaps contracts:
   Amount of gain or (loss) recognized in income on derivative amount excluded from effectiveness testing— — — 67 — — — — 89 — 
   Amount of gain or (loss) recognized in AOCI— — — 67 — — — — 89 — 
Gain (Loss) on cash flow hedging relationship:
Forward foreign exchange contracts:
   Amount of gain or (loss) reclassified from AOCI into income (3)(90)(25)— 5 (34)(58)65 — (57)
   Amount of gain or (loss) recognized in AOCI 10 396 (29)— 4 (3)(59)102 — (111)
Cross currency interest rate swaps contracts:
   Amount of gain or (loss) reclassified from AOCI into income— — — 182 — — — — 222 — 
   Amount of gain or (loss) recognized in AOCI$— — — (15)— — — — (68)— 
The following table is the effect of net investment hedges for the fiscal second quarters ended in 2023 and 2022:
Gain/(Loss)
Recognized In
Accumulated
OCI		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income Into IncomeGain/(Loss) Reclassified From
Accumulated OCI
Into Income
(Dollars in Millions)July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Debt$11 202 Interest (income) expense— — 
Cross Currency interest rate swaps$(24)313 Interest (income) expense— — 

The following table is the effect of net investment hedges for the fiscal six months ended in 2023 and 2022
Gain/(Loss)
Recognized In
Accumulated OCI		Location of Gain or (Loss) Reclassified from Accumulated Other Comprehensive Income Into IncomeGain/(Loss) Reclassified From
Accumulated OCI
Into Income
(Dollars in Millions)July 2, 2023July 3, 2022July 2, 2023July 3, 2022
Debt$(66)270 Interest (income) expense— — 
Cross Currency interest rate swaps$666 873 Interest (income) expense— — 
Schedule of Derivative Financial Instruments and Classification on Consolidated Balance Sheet
As of July 2, 2023, and January 1, 2023, the following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustment for fair value hedges

Line item in the Consolidated Balance Sheet in which the hedged item is includedCarrying Amount of the Hedged Liability
Cumulative Amount of Fair Value Hedging Gain/ (Loss) Included in the Carrying Amount of the Hedged Liability
(Dollars in Millions)July 2, 2023January 1, 2023July 2, 2023January 1, 2023
Long-term Debt$8,662 8,665 (1,443)(1,435)
Schedule of Effect of Derivatives not Designated as Hedging Instruments
The following table is the effect of derivatives not designated as hedging instruments for the fiscal second quarters ended 2023 and 2022:
Gain/(Loss)
Recognized In
Income on Derivative		Gain/(Loss)
Recognized In
Income on Derivative
(Dollars in Millions)Location of Gain /(Loss) Recognized in Income on DerivativeFiscal Second Quarter EndedFiscal Six Months Ended
Derivatives Not Designated as Hedging InstrumentsJuly 2, 2023July 3, 2022July 2, 2023July 3, 2022
Foreign Exchange ContractsOther (income) expense$33 73 2 102 
Summary of Activity Related to Equity Investments
The following table is a summary of the activity related to equity investments:
(Dollars in Millions)January 1, 2023July 2, 2023
Carrying Value
Changes in Fair Value Reflected in Net Income (1)
Sales/ Purchases/Other (2)
Carrying ValueNon Current Other Assets
Equity Investments with readily determinable value$576 (30)(53)493 493 
Equity Investments without readily determinable value$698 (26)75 747 747 
(1) Recorded in Other Income/Expense
(2) Other includes impact of currency
Financial Assets and Liabilities at Fair Value
The Company’s significant financial assets and liabilities measured at fair value as of July 2, 2023 and January 1, 2023 were as follows:
 July 2, 2023 January 1, 2023
(Dollars in Millions)Level 1Level 2Level 3Total
Total(1)
Derivatives designated as hedging instruments:     
Assets:     
Forward foreign exchange contracts $— 893 — 893 629 
Interest rate contracts (2)
— 1,310 — 1,310 1,534 
Total — 2,203 — 2,203 2,163 
Liabilities:     
Forward foreign exchange contracts — 446 — 446 511 
Interest rate contracts (2)
— 3,691 — 3,691 2,778 
Total — 4,137 — 4,137 3,289 
Derivatives not designated as hedging instruments:     
Assets:     
Forward foreign exchange contracts — 55 — 55 38 
Liabilities:     
Forward foreign exchange contracts — 22 — 22 68 
Other Investments:
Equity investments (3)
493 — — 493 576 
Debt securities (4)
— 9,831 — 9,831 10,487 
Other Liabilities
Contingent consideration (5)
$— — 1,142 1,142 1,120 

Gross to Net Derivative ReconciliationJuly 2, 2023January 1, 2023
(Dollars in Millions)
Total Gross Assets$2,258 2,201 
Credit Support Agreement (CSA)(2,119)(2,176)
Total Net Asset139 25 
Total Gross Liabilities4,159 3,357 
Credit Support Agreement (CSA)(3,890)(3,023)
Total Net Liabilities$269 334 


Summarized information about changes in liabilities for contingent consideration for the fiscal second quarters ended July 2, 2023 and July 3, 2022 is as follows:
July 2, 2023July 3, 2022
(Dollars in Millions)
Beginning Balance$1,120 533 
Changes in estimated fair value (6)
25 (88)
Additions— 91 
Payments(3)— 
Ending Balance$1,142 536 
(1)2022 assets and liabilities are all classified as Level 2 with the exception of equity investments of $576 million, which are classified as Level 1 and contingent consideration of $1,120 million, classified as Level 3.
(2) Includes cross currency interest rate swaps and interest rate swaps.
(3)    Classified as non-current other assets.
(4)    Classified within cash equivalents and current marketable securities.
(5)    Includes $1,137 million and $1,116 million, classified as non-current other liabilities as of July 2, 2023 and January 1, 2023, respectively.
(6) Ongoing fair value adjustment amounts are primarily recorded in Research and Development expense.
Marketable Securities
The Company's cash, cash equivalents and current marketable securities as of July 2, 2023 comprised:
(Dollars in Millions)Carrying AmountGain/(Loss)Estimated Fair ValueCash & Cash EquivalentsCurrent Marketable Securities
Cash$4,430 — 4,430 4,430 — 
Non-U.S. sovereign securities423 — 423 423 — 
U.S. reverse repurchase agreements8,991 — 8,991 8,991 — 
Corporate debt securities(1)
641 — 641 368 273 
Money market funds3,570 — 3,570 3,570 — 
Time deposits(1)
619 — 619 619 — 
   Subtotal 18,674 — 18,674 18,401 273 
Unrealized Loss
U.S. Gov’t securities9,416 (5)9,411 2,729 6,682 
U.S. Gov’t Agencies123 (2)121 — 121 
Other sovereign securities9 — 9 7 2 
Corporate debt securities291 (1)290 46 244 
   Subtotal available for sale debt(2)
$9,839 (8)9,831 2,782 7,049 
Total cash, cash equivalents and current marketable securities$28,513 (8)28,505 21,183 7,322 
(1) Held to maturity investments are reported at amortized cost and gains or losses are reported in earnings.
(2) Available for sale debt securities are reported at fair value with unrealized gains and losses reported net of taxes in other comprehensive income.
Schedule of Available for Sale Securities Maturities
The contractual maturities of the available for sale securities as of July 2, 2023 are as follows:
(Dollars in Millions)Cost BasisFair Value
Due within one year$9,823 9,815 
Due after one year through five years16 16 
Due after five years through ten years— — 
Total debt securities$9,839 9,831 
Financial Liabilities not Measured at Fair Value
Financial Instruments not measured at Fair Value:
The following financial liabilities are held at carrying amount on the consolidated balance sheet as of July 2, 2023:
(Dollars in Millions)Carrying AmountEstimated Fair Value
Financial Liabilities  
Current Debt$11,701 11,676 
Non-Current Debt  
5.50% Notes due 2024 (500MM GBP 1.2605)
629 627 
2.625% Notes due 2025
749 726 
0.55% Notes due 2025
926 914 
2.45% Notes due 2026
1,997 1,890 
2.95% Notes due 2027
875 954 
0.95% Notes due 2027
1,394 1,313 
2.90% Notes due 2028
1,497 1,411 
1.150% Notes due 2028 (750MM Euro 1.0873)
811 728 
6.95% Notes due 2029
298 347 
1.30% Notes due 2030
1,605 1,435 
4.95% Debentures due 2033
498 525 
4.375% Notes due 2033
854 857 
1.650% Notes due 2035 (1.5B Euro 1.0873)
1,619 1,400 
3.55% Notes due 2036
840 901 
5.95% Notes due 2037
993 1,126 
3.625% Notes due 2037
1,334 1,355 
3.40% Notes due 2038
992 889 
5.85% Debentures due 2038
697 783 
4.50% Debentures due 2040
541 539 
2.10% Notes due 2040
826 704 
4.85% Notes due 2041
297 299 
4.50% Notes due 2043
496 499 
3.70% Notes due 2046
1,977 1,758 
3.75% Notes due 2047
811 871 
3.50% Notes due 2048
743 640 
2.25% Notes due 2050
807 666 
2.45% Notes due 2060
1,053 811 
5.50% Debentures due 2025*
748 752 
5.35% Debentures due 2026*
747 756 
5.05% Debentures due 2028*
994 1,006 
5.00% Debentures due 2030*
992 1,006 
4.90% Debentures due 2033*
1,240 1,264 
5.10% Debentures due 2043*
741 763 
5.05% Debentures due 2053*
1,476 1,531 
5.20% Debentures due 2063*
738 765 
Other66 66 
Total Non-Current Debt$33,901 32,877