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2015 2014 Cash and cash equivalents $ 3,379 $ 1,795 Trading marketable securities 82 80 Level 1 - Assets $ 3,461 $ 1,875 Available-for-sale marketable securities Corporate and asset-backed debt securities $ 214 $ 1,525 Foreign government debt securities 96 726 United States agency debt securities 120 382 United States treasury debt securities 264 474 Certificates of deposit 8 110 Other — 12 Total available-for-sale marketable securities $ 702 $ 3,229 Foreign currency exchange forward contracts 69 32 Interest rate swap asset 15 10 Level 2 - Assets $ 786 $ 3,271 Total assets measured at fair value $ 4,247 $ 5,146 Deferred compensation arrangements $ 82 $ 80 Level 1 - Liabilities $ 82 $ 80 Foreign currency exchange forward contracts $ 10 $ 12 Interest rate swap liability 4 — Level 2 - Liabilities $ 14 $ 12 Contingent consideration Beginning balance $ 48 $ 59 Additions 11 — Losses included in earnings — 4 Settlements (3) (15) Balance at the end of the period $ 56 $ 48 Level 3 - Liabilities $ 56 $ 48 Total liabilities measured at fair value $ 152 $ 140 Fair Value of Available for Sale Securities by Contractual Maturity 2015 2014 Due in one year or less $ 588 $ 430 Due after one year through three years $ 114 $ 2,505 Due after three years $ — $ 294 On December 31, 2015 the aggregate difference between the cost and fair value of available-for-sale marketable securities is not material. Interest receivable of $2 related to our marketable securities portfolio was recorded in prepaid expenses and other current assets. While some investments have been downgraded by rating agencies since their initial purchase, 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 & Poors) and A (Fitch). We do not intend 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 have other-than-temporarily impairment on December 31, 2015. Securities in a Continuous Unrealized Loss Position Number of Investments Fair Value Corporate and Asset-Backed 98 $ 117 Foreign Government 10 30 United States Agency 8 18 United States Debt 15 38 Certificate of Deposit 6 4 Total 137 $ 207 On December 31, 2015 substantially all our investments with unrealized losses that are not deemed to be other-than-temporarily impaired have been in a continuous unrealized loss position for less than twelve months and the losses are not considered material. The total of interest and marketable securities income was $14, $28, and $24 in 2015, 2014, and 2013. The amounts are included in other income (expense), net. NOTE 5 - DERIVATIVE INSTRUMENTS We use operational and economic hedges, foreign currency exchange forward contracts, net investment hedges and interest rate derivative instruments to manage the impact of currency exchange and interest rate fluctuations on earnings and cash flow. At the inception, the derivative is designated as a cash flow hedge, fair value hedge or is a free standing derivative. We do not enter into derivative instruments for speculative purposes. Non-designated Foreign Exchange Forward Contract Derivatives Derivative forward contracts are used to offset our exposure to the change in value of specific foreign currency denominated assets and liabilities. These derivatives are not designated as hedges and, therefore, changes in the value of these forward contracts are recognized in earnings, thereby offsetting the current earnings effect of the related changes in value of foreign currency denominated assets and liabilities. The estimated fair value of our forward currency exchange contracts represents the measurement of the contracts at month-end spot rates as adjusted by current forward points. Designated Foreign Exchange Forward Contract Derivatives We use a layered hedging program to hedge select anticipated foreign currency cash flows to reduce volatility in both cash flows and reported earnings. These foreign exchange contracts generally have maturities up to eighteen months. For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of AOCI and reclassified into other income (expense), net or cost of sales within earnings in the same period during which the hedged transaction affects earnings. Cash flows associated with these hedges are included in cash from operations in the same category as the cash flows from the items being hedged. Designated Net Investment Hedges We have designated certain long-term intercompany loans payable and forward exchange contracts as net investment hedges of our investments in certain international subsidiaries that use the Euro as their functional currency. The effective portion of derivatives designated as net investment hedges are recorded at fair value at each balance sheet date and the change in fair value is recorded as a component of AOCI. On December 31, 2015 the total after-tax amount in AOCI related to our designated net investment hedges was $21. For derivative instruments that are designated and qualify as a net investment hedge, the effective portion of the derivative's gain or loss is reported as a component of OCI and recorded in AOCI. We use the forward method to measure ineffectiveness. Under this method, for each reporting period, the change in the carrying value of the Euro-denominated amounts due to remeasurement of the effective portion is reported as a component of AOCI and the remaining change in the carrying value of the ineffective portion, if any, is recognized in other income (expense), net. The gain or loss related to settled net investment hedges will be subsequently reclassified into net earnings when the hedged net investment is either sold or substantially liquidated. We evaluate the effectiveness of our net investment hedges quarterly and did not record any ineffectiveness in 2015. STRYKER CORPORATION 2015 Form 10-K 25 Dollar amounts in millions except per share amounts or as otherwise specified.