Issue link: http://catalog.e-digitaleditions.com/i/275023
27 Dollar amounts in millions except per share amounts or as otherwise specified Items reclassified out of AOCI into earnings for the years ended December 31, 2013 and 2012 were: Year ended December 31, 2013 Year ended December 31, 2012 Detail of AOCI Components Amount Reclassified from AOCI Affected Line Item in the Consolidated Statements of Earnings Amount Reclassified from AOCI Affected Line Item in the Consolidated Statements of Earnings Unrealized gains on available-for-sale marketable securities $ (21) Other (income) expense $ (37) Other (income) expense — Income tax expense 1 Income tax expense $ (21) Net of tax $ (36) Net of tax Amortization of defined benefit pension items: Actuarial losses $ 7 Cost of sales $ 2 Cost of sales (2) Income tax benefit (1) Income tax benefit $ 5 Net of tax $ 1 Net of tax Unrealized gain (loss) on hedge $ (9) Other (income) expense $ — Other (income) expense 4 Income tax expense — Income tax expense $ (5) Net of tax $ — Net of tax NOTE 3 - FAIR VALUE MEASUREMENTS Accounting guidance on fair value measurements for certain financial assets and liabilities requires that financial assets and liabilities carried at fair value be 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 the reporting entity's own assumptions or external inputs from active markets. When applying 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 similar or identical instruments, where available, or based on other observable inputs. There were no significant transfers into or out of Level 1 or Level 2 that occurred between December 31, 2012 and December 31, 2013. The fair value of our Level 3 assets and liabilities are calculated as the net present value of expected cash flows based on externally provided or obtained inputs. Certain Level 3 assets may also be based on sale prices of similar assets. Our fair value calculations take into consideration our credit risk and that of our counterparties. Should a counterparty default, our maximum exposure to loss is the asset balance of the instrument. We did not change our valuation techniques used in measuring the fair value of any financial assets and liabilities during the year. Our valuation of our assets and liabilities measured at fair value at December 31, 2013 and 2012: Total (Level 1) (Level 2) (Level 3) 2013 2012 2013 2012 2013 2012 2013 2012 Assets: Cash and cash equivalents $ 1,339 $ 1,395 $ 1,339 $ 1,395 $ — $ — $ — $ — Available-for-sale marketable securities Corporate and asset-backed debt securities 1,177 1,280 — — 1,177 1,280 — — Foreign government debt securities 845 848 — — 845 848 — — United States agency debt securities 211 288 — — 211 288 — — United States treasury debt securities 350 343 — — 350 343 — — Certificates of deposit 53 114 — — 53 114 — — Other 5 17 — — 5 17 — — Total available-for-sale marketable securities 2,641 2,890 — — 2,641 2,890 — — Trading marketable securities 72 57 72 57 — — — — Foreign currency exchange forward contracts 25 3 — — 25 3 — — $ 4,077 $ 4,345 $ 1,411 $ 1,452 $ 2,666 $ 2,893 $ — $ — Liabilities: Deferred compensation arrangements $ 72 $ 57 $ 72 $ 57 $ — $ — $ — $ — Contingent consideration 59 103 — — — — 59 103 Foreign currency exchange forward contracts 2 1 — — 2 1 — — $ 133 $ 161 $ 72 $ 57 $ 2 $ 1 $ 59 $ 103