v3.25.4
Financial Instruments
 12 Months Ended
Dec. 31, 2025
Fair Value Disclosures [Abstract]  
Financial Instruments Financial Instruments
Investments in Equity and Debt Securities
Our equity investments are accounted for using three different methods depending on the type of equity investment:
•Investments in companies over which we have significant influence but not a controlling interest are accounted for using the equity method, with our share of earnings or losses reported in other-net, (income) expense.
•For equity investments that do not have readily determinable fair values, we measure these investments at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer. Any change in recorded value is recorded in other-net, (income) expense.
•Our public equity investments are measured and carried at fair value. Any change in fair value is recognized in other-net, (income) expense.
We record our available-for-sale debt securities at fair value, with changes in fair value reported as a component of accumulated other comprehensive income (loss).
Fair Value of Investments
The following table summarizes certain fair value information at December 31, 2025 and 2024 for investment assets measured at fair value on a recurring basis, as well as the carrying amount and amortized cost of certain other investments:
   Fair Value Measurements Using 
Carrying
Amount		CostQuoted Prices in Active Markets for Identical Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Fair
Value
December 31, 2025
Cash equivalents(1)
$4,392 $4,392 $4,392 $— $— $4,392 
Short-term investments:
Available-for-sale debt securities(2)
$16$16$9$7$—$16
Other securities8989—127889
Short-term investments$105 
Noncurrent investments:
Available-for-sale debt securities(2)
$360 $368 $69 $291 $— $360 
Other securities85 54 — 2 83 85 
Marketable equity securities223 292 223 — — 223 
Equity investments without readily determinable fair values(3)
846 
Equity method investments(3)
1,288 
Noncurrent investments$2,802 
December 31, 2024
Cash equivalents(1)
$1,507 $1,507 $1,494 $13 $— $1,507 
Short-term investments:
Available-for-sale debt securities(2)
$95 $95 $29 $66 $— $95 
Other securities60 60 — 17 43 60 
Short-term investments$155 
Noncurrent investments:
Available-for-sale debt securities(2)
$573 $616 $140 $433 $— $573 
Other securities150 103 — 6 144 150 
Marketable equity securities486 495 486 — — 486 
Equity investments without readily determinable fair values(3)
864 
Equity method investments(3)
1,143 
Noncurrent investments$3,216 
(1) We consider all highly liquid investments with a maturity of three months or less from the date of purchase to be cash equivalents. The cost of these investments approximates fair value.
(2) For available-for-sale debt securities, amounts disclosed represent the securities' amortized cost.
(3) Fair value disclosures are not applicable for equity method investments and investments accounted for under the measurement alternative for equity investments.
We determine our Level 1 and Level 2 fair value measurements based on a market approach using quoted market values, significant other observable inputs for identical or comparable assets or liabilities, or discounted cash flow analyses. Level 3 fair value measurements for other investment securities are determined using unobservable inputs, including the investments' cost adjusted for impairments and price changes from orderly transactions. Fair values are not readily available for certain equity investments measured under the measurement alternative.
Debt
Fair Value of Debt
The following table summarizes the carrying amount and fair value using Level 2 inputs for our short-term and long-term debt as of December 31:
20252024
Carrying
Amount		Fair ValueCarrying
Amount		Fair Value
Short-term commercial paper borrowings$— $— $4,338 $4,319 
Long-term debt, including current portion42,503 39,799 29,307 26,249 
Risk Management and Related Financial Instruments
To manage foreign currency and interest rate risk, we may enter into derivative instruments intended to offset losses and gains on the assets, liabilities, and transactions being hedged. Such instruments are entered into in accordance with documented corporate risk-management policies. Management reviews the correlation and effectiveness of our derivatives on a quarterly basis. Derivative instruments are recorded at fair value, with gains and losses recognized as follows:
•For derivative instruments designated as fair value hedges, gains and losses are recognized in earnings to offset the respective losses and gains recognized on the underlying exposure.
•For derivative instruments designated as cash flow hedges, gains and losses are reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings as an offset in the same period the hedged transaction affects earnings.
•For derivative and non-derivative instruments designated as net investment hedges, gains and losses are reported as a component of accumulated other comprehensive income (loss) and reclassified into earnings upon the sale or substantial liquidation of our net investments.
•For derivative contracts not designated as hedging instruments, gains and losses are recognized in earnings to offset the respective losses and gains recognized on the underlying exposure.
Cash settlements of our derivative instruments are classified as operating activities in our consolidated statements of cash flows.
Foreign Currency Risk
As a global company, we face foreign currency risk exposure from fluctuating currency exchange rates, primarily the U.S. dollar against the euro, Japanese yen, Chinese yuan, and British pound sterling. We manage foreign currency risk primarily through the use of foreign currency debt and foreign currency forward contracts. Our foreign currency-denominated notes designated as accounting hedges had carrying amounts of $6.0 billion and $5.3 billion as of December 31, 2025 and 2024, respectively. Below summarizes the aggregate outstanding notional amounts of our foreign currency forward contracts in U.S. dollar equivalent as of December 31:
20252024
PurchaseSellPurchaseSell
Designated as accounting hedges$67 $— $8,909 $— 
Not designated as accounting hedges14,281 9,264 8,755 8,848 
Forward contracts generally have maturities not exceeding 12 months.
Interest Rate Risk
In the normal course of business, our operations are exposed to fluctuations in interest rates which can vary the costs of financing, investing, and operating. Our primary interest-rate risk exposure results from changes in short-term U.S. dollar interest rates. In an effort to manage interest-rate exposures, we may enter into derivative contracts to achieve an acceptable balance between fixed- and floating-rate debt or to reduce cash flow variability from changes in interest rates as part of anticipated debt issuances. For 2025, 2024, and 2023, the impact of our interest rate contracts on our consolidated financial statements was not material.
Credit Risk
Financial instruments that potentially subject us to credit risk include the following:
•Trade receivables: Wholesale distributors of our products account for a substantial portion of our trade receivables; collateral is generally not required. We seek to mitigate the risk through our ongoing credit-review procedures and insurance.
•Interest-bearing investments: In accordance with documented corporate risk-management policies, we monitor the amount of credit exposure to any one issuer based on credit rating of our counterparty.
•Derivatives: In accordance with documented corporate risk-management policies, we monitor the amount of credit exposure to any one counterparty based on the credit rating of our counterparty.
The majority of our cash is held by a few major financial institutions that have been identified as Global Systemically Important Banks (G-SIBs) by the Financial Stability Board. G-SIBs are subject to rigorous regulatory testing and oversight and must meet certain capital requirements. We monitor our exposures with these institutions and do not expect any of these institutions to fail to meet their obligations.
Impact of Significant Risk Management Programs on the Financial Statements
The following table summarizes the effects of significant risk-management programs:
202520242023
Recognized in other–net, (income) expense:
Foreign currency forward contracts not designated as accounting hedges$489 $288 $26 
Recognized in other comprehensive income (loss):
Foreign currency-denominated notes:
Designated as accounting hedges(690)338 (220)
Foreign currency forward contracts:
Designated as accounting hedges(643)343 (107)
The following table summarizes the fair value of assets and liabilities on a gross basis for significant risk-management programs using Level 2 inputs as of December 31:
20252024
Foreign currency forward contracts:
Designated as accounting hedges:
Other receivables$— $297 
Not designated as accounting hedges:
Other receivables39 40 
Other current liabilities(329)(93)