Fair value measurement (Tables)

12 Months Ended

Dec. 31, 2018

Fair value of each major class of financial assets and liabilities measured at fair value on a recurring basis

The fair values of each major class of the Company’s financial assets and liabilities measured at fair value on a recurring basis were as follows (in millions):



Fair value measurement as of December 31, 2018, using:	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Interest-bearing securities:
U.S. Treasury notes	$	2,663	$	—	$	—	$	2,663
U.S. Treasury bills	8,191		—		—		8,191
Other government-related debt securities:
U.S.	—		110		—		110
Foreign and other	—		932		—		932
Corporate debt securities:
Financial	—		2,697		—		2,697
Industrial	—		2,504		—		2,504
Other	—		562		—		562
Residential-mortgage-backed securities	—		1,422		—		1,422
Other mortgage- and asset-backed securities	—		469		—		469
Money market mutual funds	5,659		—		—		5,659
Other short-term interest-bearing securities	—		3,515		—		3,515
Equity securities	176		—		—		176
Derivatives:
Foreign currency contracts	—		182		—		182
Cross-currency swap contracts	—		170		—		170
Interest rate swap contracts	—		56		—		56
Total assets	$	16,689	$	12,619	$	—	$	29,308
Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	26	$	—	$	26
Cross-currency swap contracts	—		401		—		401
Interest rate swap contracts	—		149		—		149
Contingent consideration obligations	—		—		72		72
Total liabilities	$	—	$	576	$	72	$	648



Fair value measurement as of December 31, 2017, using:	Quoted prices in active markets for identical assets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Total
Assets:
Interest-bearing securities:
U.S. Treasury notes	$	8,242	$	—	$	—	$	8,242
Other government-related debt securities:
U.S.	—		223		—		223
Foreign and other	—		2,422		—		2,422
Corporate debt securities:
Financial	—		10,072		—		10,072
Industrial	—		9,670		—		9,670
Other	—		1,390		—		1,390
Residential-mortgage-backed securities	—		2,168		—		2,168
Other mortgage- and asset-backed securities	—		2,297		—		2,297
Money market mutual funds	3,245		—		—		3,245
Other short-term interest-bearing securities	—		1,440		—		1,440
Equity securities	149		—		—		149
Derivatives:
Foreign currency contracts	—		6		—		6
Cross-currency swap contracts	—		270		—		270
Interest rate swap contracts	—		10		—		10
Total assets	$	11,636	$	29,968	$	—	$	41,604
Liabilities:
Derivatives:
Foreign currency contracts	$	—	$	204	$	—	$	204
Cross-currency swap contracts	—		220		—		220
Interest rate swap contracts	—		61		—		61
Contingent consideration obligations	—		—		69		69
Total liabilities	$	—	$	485	$	69	$	554

Change in carrying amounts of contingent consideration obligations

Changes in the carrying amounts of contingent consideration obligations were as follows (in millions):



	Years ended December 31,
	2018			2017			2016
Beginning balance	$	69		$	179		$	188
Addition from K-A acquisition	45			—			—
Net changes in valuations	(42		)	(110		)	(9		)
Ending balance	$	72		$	69		$	179