Quarterly report pursuant to Section 13 or 15(d)

Fair Value

v3.7.0.1
Fair Value
3 Months Ended
Apr. 01, 2017
Fair Value Disclosures [Abstract]  
Fair Value [Text Block]
Note 11: Fair Value
For information about our fair value policies, and methods and assumptions used in estimating the fair value of our financial assets and liabilities, see “Accounting Policies" note and "Fair Value" note in Part II, Item 8 of our 2016 Form 10-K.
Assets and Liabilities Measured and Recorded at Fair Value on a Recurring Basis
 
 
April 1, 2017
 
December 31, 2016
 
 
Fair Value Measured and Recorded at Reporting Date Using
 
 
 
Fair Value Measured and Recorded at Reporting Date Using
 
 
(In Millions)
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash equivalents:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
$

 
$
650

 
$

 
$
650

 
$

 
$
498

 
$

 
$
498

Financial institution instruments
 
1,075

 
528

 

 
1,603

 
1,920

 
811

 

 
2,731

Government debt
 

 
50

 

 
50

 

 
332

 

 
332

Reverse repurchase agreements
 

 
1,398

 

 
1,398

 

 
768

 

 
768

Short-term investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
320

 
1,103

 
6

 
1,429

 
391

 
941

 
6

 
1,338

Financial institution instruments
 
253

 
1,140

 

 
1,393

 
119

 
1,484

 

 
1,603

Government debt
 
100

 
136

 

 
236

 
71

 
213

 

 
284

Trading assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Asset-backed securities
 

 
57

 
6

 
63

 

 
80

 
7

 
87

Corporate debt
 
2,307

 
598

 

 
2,905

 
2,237

 
610

 

 
2,847

Financial institution instruments
 
873

 
561

 

 
1,434

 
973

 
671

 

 
1,644

Government debt
 
2,313

 
2,588

 

 
4,901

 
2,063

 
1,673

 

 
3,736

Other current assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets
 

 
285

 

 
285

 

 
382

 

 
382

Loans receivable
 

 
215

 

 
215

 

 
326

 

 
326

Marketable equity securities
 
6,831

 

 

 
6,831

 
6,180

 

 

 
6,180

Other long-term investments:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate debt
 
1,644

 
664

 
6

 
2,314

 
1,126

 
869

 
6

 
2,001

Financial institution instruments
 
1,021

 
689

 

 
1,710

 
663

 
1,095

 

 
1,758

Government debt
 
888

 
237

 

 
1,125

 
681

 
276

 

 
957

Other long-term assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative assets
 

 
74

 
9

 
83

 

 
31

 
9

 
40

Loans receivable
 

 
360

 

 
360

 

 
236

 

 
236

Total assets measured and recorded at fair value
 
17,625

 
11,333

 
27

 
28,985

 
16,424

 
11,296

 
28

 
27,748

Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other accrued liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
 

 
304

 

 
304

 

 
371

 

 
371

Other long-term liabilities:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Derivative liabilities
 

 
193

 
30

 
223

 

 
179

 
33

 
212

Total liabilities measured and recorded at fair value
 
$

 
$
497

 
$
30

 
$
527

 
$

 
$
550

 
$
33

 
$
583


During the first three months of 2017, we transferred approximately $736 million of assets from Level 1 to Level 2 of the fair value hierarchy and approximately $762 million of assets from Level 2 to Level 1 ($622 million of assets from Level 1 to Level 2 and $233 million from Level 2 to Level 1 during the first three months of 2016). These transfers were based on changes in market activity for the underlying instruments.
Fair Value Option for Loans Receivable
As of April 1, 2017 and December 31, 2016, the fair value of our loans receivable for which we elected the fair value option did not significantly differ from the contractual principal balance based on the contractual currency.
Assets Measured and Recorded at Fair Value on a Non-Recurring Basis
Our non-marketable equity investments, marketable equity method investments, and non-financial assets, such as intangible assets and property, plant and equipment, are recorded at fair value only if an impairment is recognized.
We classified non-marketable equity investments as Level 3. Impairments recognized on non-marketable equity investments held as of April 1, 2017 were $48 million during the first three months of 2017 (impairments recognized during the first three months of 2016 on non-marketable equity investments held as of April 2, 2016 were insignificant.)
Financial Instruments Not Recorded at Fair Value on a Recurring Basis
The carrying amounts and fair values of financial instruments not recorded at fair value on a recurring basis at the end of each period were as follows:
 
 
April 1, 2017
(In Millions)
 
Carrying
Amount
 
Fair Value Measured Using
 
Fair Value
Level 1
 
Level 2
 
Level 3
 
Grants receivable
 
$
359

 
$

 
$
360

 
$

 
$
360

Loans receivable
 
$
265

 
$

 
$
265

 
$

 
$
265

Non-marketable cost method investments
 
$
3,418

 
$

 
$

 
$
4,287

 
$
4,287

Reverse repurchase agreements
 
$
250

 
$

 
$
250

 
$

 
$
250

Short-term debt
 
$
5,043

 
$
3,003

 
$
2,567

 
$

 
$
5,570

Long-term debt
 
$
20,678

 
$
8,618

 
$
13,425

 
$

 
$
22,043

 
 
December 31, 2016
(In Millions)
 
Carrying
Amount
 
Fair Value Measured Using
 
Fair Value
Level 1
 
Level 2
 
Level 3
 
Grants receivable
 
$
361

 
$

 
$
362

 
$

 
$
362

Loans receivable
 
$
265

 
$

 
$
265

 
$

 
$
265

Non-marketable cost method investments
 
$
3,098

 
$

 
$

 
$
3,890

 
$
3,890

Reverse repurchase agreements
 
$
250

 
$

 
$
250

 
$

 
$
250

Short-term debt
 
$
4,609

 
$
3,006

 
$
2,114

 
$

 
$
5,120

Long-term debt
 
$
20,649

 
$
12,171

 
$
9,786

 
$

 
$
21,957


The carrying amount and fair value of short-term debt exclude drafts payable.