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Derivative Instruments
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Instruments DERIVATIVE INSTRUMENTS
We use operational and economic hedges, foreign currency exchange forward contracts, net investment hedges (both derivative and non-derivative financial instruments) and interest rate derivative instruments to manage the impact of currency exchange and interest rate fluctuations on earnings, cash flow and equity. We do not enter into derivative instruments for speculative purposes. We are exposed to potential credit loss in the event of nonperformance by counterparties on our outstanding derivative instruments but do not anticipate nonperformance by any of our counterparties. Should a counterparty default, our maximum loss exposure is the asset balance of the instrument.
Foreign Currency Hedges
2022Cash FlowNet InvestmentNon-DesignatedTotal
Gross notional amount$1,053 $1,598 $3,417 $6,068 
Maximum term in years3.9
Fair value:
Other current assets$20 $— $9 $29 
Other noncurrent assets1 89 — 90 
Other current liabilities(6)— (79)(85)
Other noncurrent liabilities(1)(16)— (17)
Total fair value$14 $73 $(70)$17 
2021
Gross notional amount$973 $2,266 $5,512 $8,751 
Maximum term in years4.9
Fair value:
Other current assets$15 $39 $92 $146 
Other noncurrent assets1 65 — 66 
Other current liabilities(7)— (10)(17)
Total fair value$9 $104 $82 $195 
We had €1.5 billion and €2.0 billion at December 31, 2022 and 2021 in certain forward currency contracts designated as net investment hedges to hedge a portion of our investments in certain of our entities with functional currencies denominated in Euros. In addition to these derivative financial instruments designated as net investment hedges, we had €4.4 billion at December 31, 2022 and 2021 of senior unsecured notes designated as net investment hedges to selectively hedge portions of our investment in certain international subsidiaries. The currency effects of our Euro-denominated senior unsecured notes are reflected in AOCI within shareholders' equity where they offset gains and losses recorded on our net investment in international subsidiaries.
In 2022 we settled certain foreign currency forward contracts designated as net investment hedges resulting in cash proceeds of $197. The amounts in AOCI related to settled net investment
hedges will remain in AOCI until the hedged investment is either sold or substantially liquidated.
The total after-tax gain (loss) recognized in OCI related to designated net investment hedges was $321 in 2022.
Net Currency Exchange Rate Gains (Losses)
Derivative InstrumentRecorded in:202220212020
Cash FlowCost of sales$23 $(12)$5 
Net InvestmentOther income (expense), net39 35 28 
Non-DesignatedOther income (expense), net1 (10)(13)
Total$63 $13 $20 
Pretax gains (losses) on derivatives designated as cash flow hedges of $32 and net investment hedges of $34 recorded in AOCI are expected to be reclassified to cost of sales and other income (expense), net in earnings within 12 months as of December 31, 2022. This cash flow hedge reclassification is primarily due to the sale of inventory that includes previously hedged purchases. A component of the AOCI amounts related to net investment hedges is reclassified over the life of the hedge instruments as we elected to exclude the initial value of the component related to the spot-forward difference from the effectiveness assessment.
Interest Rate Hedges
Pretax gains of $5 recorded in AOCI related to other interest rate hedges closed in conjunction with debt issuances are expected to be reclassified to other income (expense), net in earnings within 12 months of December 31, 2022. The cash flow effect of interest rate hedges is recorded in cash flow from operations.