Fair Value Measurements

3 Months Ended

Mar. 28, 2026

The following tables present information about the company’s financial assets and liabilities measured at fair value on a recurring basis:


	March 28,		Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs
(In millions)	2026		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	137	$	137	$	—	$	—

Investments	110		25		—		85

Insurance contracts	266		—		266		—
Derivative contracts	780		—		780		—
Contingent consideration	67		—		—		67
Total assets	$	1,362	$	163	$	1,047	$	152

Liabilities
Derivative contracts	$	598	$	—	$	598	$	—
Contingent consideration	168		—		—		168
Total liabilities	$	767	$	—	$	598	$	168


	December 31,		Quoted prices in active markets		Significant other observable inputs		Significant unobservable inputs
(In millions)	2025		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	6,907	$	6,907	$	—	$	—
Bank time deposits	250		250		—		—
Investments	103		27		—		76

Insurance contracts	280		—		280		—
Derivative contracts	685		—		685		—
Contingent consideration	67		—		—		67
Total assets	$	8,292	$	7,184	$	966	$	143

Liabilities
Derivative contracts	$	506	$	—	$	506	$	—
Contingent consideration	16		—		—		16
Total liabilities	$	522	$	—	$	506	$	16

In the three-month periods ended March 28, 2026, and March 29, 2025, the company recorded $(1) million and $2 million, respectively, of net gains/(losses) on investments, which are included in other income/(expense) in the accompanying statements of income.

The following table provides a rollforward of investments classified as level 3:


	Three months ended
(In millions)		March 28, 2026		March 29, 2025
Investments
Beginning balance		$	76	$	21
Purchases		9		11


Ending balance		$	85	$	31

The following table provides a rollforward of the fair value, as determined by level 3 inputs (such as likelihood of a qualifying transaction), of the contingent consideration asset:


	Three months ended
(In millions)	March 28, 2026
Contingent consideration asset
Beginning balance	$	67


Changes in fair value included in earnings	1
Ending balance	$	67

The following table provides a rollforward of the fair value, as determined by level 3 inputs (such as likelihood of achieving production or revenue milestones, as well as changes in the fair values of the investments underlying a recapitalization investment portfolio), of the contingent consideration liabilities.


	Three months ended
(In millions)		March 28, 2026		March 29, 2025
Contingent consideration liabilities
Beginning balance		$	16	$	13
Acquisitions (including assumed balances)		153		—

Changes in fair value included in earnings		—		1
Ending balance		$	168	$	13

Fair Value of Other Financial Instruments

The carrying value and fair value of the company’s debt instruments are as follows:


	March 28, 2026				December 31, 2025
(In millions)	Carrying value		Fair value		Carrying value		Fair value
Senior notes	$	42,554	$	39,354	$	39,171	$	36,606

Commercial paper	393		393		—		—
Other	1		1		1		1
	$	42,947	$	39,747	$	39,172	$	36,607

The fair value of debt instruments, excluding private placement notes, was determined based on quoted market prices and on borrowing rates available to the company at the respective period ends, which represent level 2 measurements. The fair value of private placement notes was determined based on internally developed pricing models and unobservable inputs, which represent level 3 measurements.