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Valuation of debt and equity investments and certain liabilities | 9 Months Ended
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Sep. 30, 2025
Fair Value Disclosures [Abstract] |
Valuation of debt and equity investments and certain liabilities | Valuation of debt and equity investments and certain liabilities Investments measured at fair value Money market funds, debt investments and mutual funds are stated at fair value, which is generally based on market prices or broker quotes. We classify all debt investments as available-for-sale. See Fair-value considerations. Unrealized gains and losses are recorded as an increase or decrease, net of taxes, in AOCI on our Consolidated Balance Sheets, and any credit losses are recorded as an allowance for credit losses with an offset recognized in OI&E in our Consolidated Statements of Income. Our mutual funds hold a variety of debt and equity investments intended to generate returns that offset changes in certain deferred compensation liabilities. We record changes in the fair value of these mutual funds and the related deferred compensation liabilities in SG&A. Other investments Our other investments include equity-method investments and nonmarketable investments, which are not measured at fair value. These investments consist of interests in venture capital funds and other nonmarketable securities. Gains and losses from equity-method investments are recognized in OI&E based on our ownership share of the investee’s financial results. Nonmarketable securities are measured at cost with adjustments for observable changes in price or impairments. Gains and losses on nonmarketable investments are recognized in OI&E. Details of our investments are as follows:
| September 30, 2025 |  | December 31, 2024
| Cash and Cash Equivalents |  | Short-Term Investments |  | Long-Term Investments |  | Cash and Cash Equivalents |  | Short-Term Investments |  | Long-Term Investments
Measured at fair value: |  |  |  |  |  |  |  |  |  |  |
Money market funds | $ | 737 |  |  | $ | — |  |  | $ | — |  |  | $ | 762 |  |  | $ | — |  |  | $ | — |
Corporate obligations | 738 |  |  | 503 |  |  | — |  |  | 694 |  |  | 796 |  |  | — |
U.S. government and agency securities | 1,432 |  |  | 1,198 |  |  | — |  |  | 752 |  |  | 3,485 |  |  | — |
Non-U.S. government and agency securities | 50 |  |  | 174 |  |  | — |  |  | 249 |  |  | 99 |  |  | — |
Mutual funds | — |  |  | — |  |  | 11 |  |  | — |  |  | — |  |  | 11 |
Total | 2,957 |  |  | 1,875 |  |  | 11 |  |  | 2,457 |  |  | 4,380 |  |  | 11 |
Other measurement basis: |  |  |  |  |  |  |  |  |  |  |
Equity-method investments | — |  |  | — |  |  | 2 |  |  | — |  |  | — |  |  | 8 |
Nonmarketable investments | — |  |  | — |  |  | 4 |  |  | — |  |  | — |  |  | 4 |
Total | — |  |  | — |  |  | 6 |  |  | — |  |  | — |  |  | 12 |
Cash on hand | 354 |  |  | — |  |  | — |  |  | 743 |  |  | — |  |  | — |
Total | $ | 3,311 |  |  | $ | 1,875 |  |  | $ | 17 |  |  | $ | 3,200 |  |  | $ | 4,380 |  |  | $ | 23 |
As of September 30, 2025, and December 31, 2024, unrealized gains and losses associated with our debt investments were not material. We did not recognize any credit losses related to debt investments for the first nine months of 2025 and 2024. The following table presents the aggregate maturities of our debt investments as of September 30, 2025:
|  |  |  |  |  | Fair Value
One year or less |  |  |  |  |  | $ | 3,764 |
One to two years |  |  |  |  |  | 331 |
Proceeds from sales, redemptions and maturities of short-term debt investments were $1.26 billion and $2.70 billion for the third quarters of 2025 and 2024, respectively, and $5.20 billion and $8.46 billion for the first nine months of 2025 and 2024, respectively. Gross realized gains and losses from these sales were not material. Fair-value considerations We measure and report certain financial assets and liabilities at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The three-level hierarchy described below indicates the inputs used to estimate fair-value measurements. •Level 1 – Uses unadjusted quoted prices that are available in active markets for identical assets or liabilities as of the measurement date. •Level 2 – Uses inputs other than Level 1 that are either directly or indirectly observable as of the measurement date through correlation with market data. Inputs include quoted prices for similar assets and liabilities in active markets, quoted prices in markets that are not active and models or other pricing methodologies that do not require significant judgment. We utilize a third-party data service to provide Level 2 valuations, and we verify these valuations for reasonableness. •Level 3 – Uses inputs that are unobservable, supported by little or no market activity and reflect the use of significant management judgment. As of September 30, 2025, and December 31, 2024, we had no Level 3 assets or liabilities. The following are our assets and liabilities that were accounted for at fair value on a recurring basis. These tables do not include cash on hand, assets held by our postretirement plans, or assets and liabilities that are measured at historical cost or any basis other than fair value.
| September 30, 2025 |  | December 31, 2024
| Level 1 |  | Level 2 |  | Total |  | Level 1 |  | Level 2 |  | Total
Assets: |  |  |  |  |  |  |  |  |  |  |
Money market funds | $ | 737 |  |  | $ | — |  |  | $ | 737 |  |  | $ | 762 |  |  | $ | — |  |  | $ | 762 |
Corporate obligations | — |  |  | 1,241 |  |  | 1,241 |  |  | — |  |  | 1,490 |  |  | 1,490 |
U.S. government and agency securities | 2,231 |  |  | 399 |  |  | 2,630 |  |  | 2,591 |  |  | 1,646 |  |  | 4,237 |
Non-U.S. government and agency securities | — |  |  | 224 |  |  | 224 |  |  | — |  |  | 348 |  |  | 348 |
Mutual funds | 11 |  |  | — |  |  | 11 |  |  | 11 |  |  | — |  |  | 11 |
Total assets | $ | 2,979 |  |  | $ | 1,864 |  |  | $ | 4,843 |  |  | $ | 3,364 |  |  | $ | 3,484 |  |  | $ | 6,848 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |
Deferred compensation | $ | 475 |  |  | $ | — |  |  | $ | 475 |  |  | $ | 443 |  |  | $ | — |  |  | $ | 443 |
Total liabilities | $ | 475 |  |  | $ | — |  |  | $ | 475 |  |  | $ | 443 |  |  | $ | — |  |  | $ | 443 |

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/820/tableOfContent + Details
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