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Fair Value Measurements | 6 Months Ended
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Jun. 30, 2017
Fair Value Disclosures [Abstract] |
Fair Value Measurements | FAIR VALUE MEASUREMENTS Financial assets and liabilities carried at fair value are classified and disclosed in one of the following three categories:
Level 1 | Quoted market prices in active markets for identical assets or liabilities
Level 2 | Observable market-based inputs or unobservable inputs that are corroborated by market data
Level 3 | Unobservable inputs reflecting our assumptions or external inputs from active markets
When applying the fair value principles in the valuation of assets and liabilities, we are required to maximize the use of quoted market prices and minimize the use of unobservable inputs. We calculate the fair value of our Level 1 and Level 2 instruments based on the exchange traded price of identical or similar instruments, where available, or based on other observable inputs taking into account our credit and that of our counterparties. Foreign currency exchange contracts and interest rate hedges are included in Level 2 as we use inputs other than quoted prices that are observable for the asset or liability. The Level 2 derivative instruments are primarily valued using standard calculations and models that are based on readily observable market data. Our Level 3 liabilities represent milestone payments for acquisitions recorded at fair value calculated using either the Black-Scholes option pricing model or a discounted cash flow technique. Significant unobservable inputs were used in our probability assessments and were appropriately discounted considering the uncertainties associated with the obligation. We estimate that substantially all triggering events will occur. We remeasure the fair value of our assets and liabilities each reporting period. We record the changes in fair value within selling, general and administrative expense and the changes in the time value of money within other income (expense), net.
Assets and Liabilities Measured at Fair Value
| June | December
| 2017 | 2016
Cash and cash equivalents | $ | 3,649 |  | $ | 3,316 |
Trading marketable securities | 109 |  | 94 |
Level 1 - Assets | $ | 3,758 |  | $ | 3,410 |
Available-for-sale marketable securities: |  |
Corporate and asset-backed debt securities | $ | 31 |  | $ | 25 |
United States agency debt securities | 16 |  | 9 |
United States Treasury debt securities | 28 |  | 16 |
Certificates of deposit | 23 |  | 18 |
Total available-for-sale marketable securities | $ | 98 |  | $ | 68 |
Foreign currency exchange forward contracts | 20 |  | 45 |
Interest rate swap asset | 52 |  | 57 |
Level 2 - Assets | $ | 170 |  | $ | 170 |
Total assets measured at fair value | $ | 3,928 |  | $ | 3,580 |
Deferred compensation arrangements | $ | 109 |  | $ | 94 |
Level 1 - Liabilities | $ | 109 |  | $ | 94 |
Foreign currency exchange forward contracts | $ | 37 |  | $ | 18 |
Level 2 - Liabilities | $ | 37 |  | $ | 18 |
Contingent consideration: |  |
Beginning | $ | 86 |  | $ | 56 |
Additions | 5 |  | 49 |
Change in estimate | (2 | ) | (7 | )
Settlements | (21 | ) | (12 | )
Ending | $ | 68 |  | $ | 86 |
Level 3 - Liabilities | $ | 68 |  | $ | 86 |
Total liabilities measured at fair value | $ | 214 |  | $ | 198 |
There were no significant transfers into or out of any level in 2017.
Fair Value of Available for Sale Securities by Maturity
| June 2017 | December 2016
Due in one year or less | $ | 55 |  | $ | 36 |
Due after one year through three years | $ | 43 |  | $ | 32 |
On June 30, 2017 the aggregate difference between the cost and fair value of available-for-sale marketable securities was nominal. Interest and marketable securities income was $12 and $7 in the three months and $23 and $12 in the six months 2017 and 2016, which was recorded in other income (expense), net. Less than 1% of our investments in available-for-sale marketable securities had a credit quality rating of less than A2 (Moody's), A (Standard & Poor's) and A (Fitch). We do not plan to sell the investments, and it is not more likely than not that we will be required to sell the investments before recovery of their amortized cost basis, which may be maturity. We do not consider these investments to be other-than-temporarily impaired on June 30, 2017. Substantially all our investments with unrealized losses that were not deemed to be other-than-temporarily impaired were in a continuous unrealized loss position for less than twelve months, and the losses were nominal.
Securities in a Continuous Unrealized Loss Position
| Number of Investments | Fair Value
Corporate and asset-backed | 29 | $ | 11 |
United States agency | 13 | 13 |
United States Treasury | 17 | 28 |
Certificates of deposit | 6 | 3 |
Total | 65 | $ | 55 |

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- Definition The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -URI http://asc.fasb.org/topic&trid=2155941 + Details
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