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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended
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Dec. 31, 2021
Derivative Instruments and Hedging Activities Disclosure [Abstract] |
Schedule of Notional Amounts of Outstanding Derivative Positions and Commodity Contracts | A summary of interest rate swaps outstanding at December 31, 2021, is as follows: Fixed-to-Floating Interest Rate Swaps
(Notional amount in millions)
Notional amount |  | Fixed interest rate received |  | Floating interest rate paid |  | Basis for contracted floating interest rate paid
$ | 100 |  |  | 8.10% |  | 6.00% |  | 1 month LIBOR + 5.90%
1,400 |  |  | 2.75% |  | 0.69% |  | 1 month LIBOR + 0.58%
200 |  |  | 3.68% |  | 1.17% |  | 1 month LIBOR + 1.07%
25 |  |  | 7.63% |  | 2.66% |  | 6 month LIBOR + 2.48%
50 |  |  | 7.65% |  | 2.77% |  | 6 month LIBOR + 2.57%
25 |  |  | 5.45% |  | 0.46% |  | 6 month LIBOR + 0.28%
Forward Starting Floating-to-Fixed Interest Rate Swaps
(Notional amount in millions)
Notional amount |  | Floating interest rate to be received |  | Fixed interest rate to be paid |  | Basis for contracted floating interest rate received
$ | 50 |  |  | —% |  | 3.10% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 3.06% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 2.80% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 2.81% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 2.64% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 2.64% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 2.30% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 2.08% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.77% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.51% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.50% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.20% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.14% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 0.81% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.24% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.31% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 0.71% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 0.78% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.79% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.76% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.75% |  | 3 month LIBOR + 0.00%
100 |  |  | —% |  | 1.83% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.65% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.56% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.66% |  | 3 month LIBOR + 0.00%
50 |  |  | —% |  | 1.69% |  | 3 month LIBOR + 0.00%
As of December 31, 2021, the volume of outstanding commodity contracts that were entered into to hedge forecasted transactions:
Commodity |  | December 31, 2021 |  |  |  | Term
Copper |  | 9 |  |  | Millions of pounds |  | 1 to 12 months
Gold |  | 1,402 |  |  | Troy ounces |  | 1 to 12 months
Silver |  | 412,300 |  |  | Troy ounces |  | 1 to 12 months
Schedule of Derivative Financial Instruments Recognized in Consolidated Balance Sheet | The fair value of derivative financial instruments recognized in the Consolidated Balance Sheets is as follows:
(In millions) | Notional amount |  | Other current assets |  | Other noncurrent assets |  | Other current liabilities |  | Other noncurrent liabilities |  | Type of hedge |  | Term
December 31, 2021 |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives designated as hedges |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-to-floating interest rate swaps | $ | 1,800 |  |  | $ | 22 |  |  | $ | 29 |  |  | $ | — |  |  | $ | — |  |  | Fair value |  | 8 months to 13 years
Forward starting floating-to-fixed interest rate swaps | 1,350 |  |  | — |  |  | 38 |  |  | — |  |  | 79 |  |  | Cash flow |  | 11 to 31 years
Currency exchange contracts | 1,212 |  |  | 17 |  |  | 2 |  |  | 11 |  |  | 3 |  |  | Cash flow |  | 1 to 36 months
Commodity contracts | 50 |  |  | 2 |  |  | — |  |  | 1 |  |  | — |  |  | Cash flow |  | 1 to 12 months
Total |  |  | $ | 41 |  |  | $ | 69 |  |  | $ | 12 |  |  | $ | 82 |  |  |  |  |
Derivatives not designated as hedges |  |  |  |  |  |  |  |  |  |  |  |  |
Currency exchange contracts | $ | 5,285 |  |  | $ | 34 |  |  |  |  | $ | 9 |  |  |  |  |  |  | 1 to 12 months
Commodity contracts | 62 |  |  | 1 |  |  |  |  | 1 |  |  |  |  |  |  | 1 month
Total |  |  | $ | 35 |  |  |  |  | $ | 10 |  |  |  |  |  |  |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |
Derivatives designated as hedges |  |  |  |  |  |  |  |  |  |  |  |  |
Fixed-to-floating interest rate swaps | $ | 2,075 |  |  | $ | 2 |  |  | $ | 100 |  |  | $ | — |  |  | $ | — |  |  | Fair value |  | 6 months to 14 years
Forward starting floating-to-fixed interest rate swaps | 900 |  |  | — |  |  | 17 |  |  | — |  |  | 108 |  |  | Cash flow |  | 12 to 32 years
Currency exchange contracts | 946 |  |  | 20 |  |  | 6 |  |  | 20 |  |  | 1 |  |  | Cash flow |  | 1 to 36 months
Commodity contracts | 24 |  |  | 4 |  |  | — |  |  | — |  |  | — |  |  | Cash flow |  | 1 to 12 months
Total |  |  | $ | 26 |  |  | $ | 123 |  |  | $ | 20 |  |  | $ | 109 |  |  |  |  |
Derivatives not designated as hedges |  |  |  |  |  |  |  |  |  |  |  |  |
Currency exchange contracts | $ | 5,227 |  |  | $ | 43 |  |  |  |  | $ | 34 |  |  |  |  |  |  | 1 to 12 months
Commodity contracts | 18 |  |  | 2 |  |  |  |  | — |  |  |  |  |  |  | 1 month
Total |  |  | $ | 45 |  |  |  |  | $ | 34 |  |  |  |  |  |  |
The following amounts were recorded on the Consolidated Balance Sheets related to fixed-to-floating interest rate swaps:
(In millions) | Carrying amount of the hedged assets (liabilities) |  | Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged asset (liabilities) (a)
Location on Consolidated Balance Sheets | December 31, 2021 |  |  | December 31, 2020 |  | December 31, 2021 |  | December 31, 2020 |
Long-term debt | $ | (2,413) |  |  |  | $ | (2,688) |  |  | $ | (84) |  |  | $ | (139) |  |
(a) At December 31, 2021 and 2020, these amounts include the cumulative liability amount of fair value hedging adjustments remaining for which the hedge accounting has been discontinued of $33 million and $37 million, respectively.
Schedule of Impact of Hedging Activities to Consolidated Statement of Income | The impact of hedging activities to the Consolidated Statements of Income is as follows:
| 2021 |  |
(In millions) | Net sales |  | Cost of products sold |  | Interest expense - net |  |
Amounts from Consolidated Statements of Income | $ | 19,628 |  |  | $ | 13,293 |  |  | $ | 144 |  |  |
Gain (loss) on derivatives designated as cash flow hedges |  |  |  |  |  |  |
Currency exchange contracts |  |  |  |  |  |  |
Hedged item | $ | 6 |  |  | $ | — |  |  | $ | — |  |  |
Derivative designated as hedging instrument | (6) |  |  | — |  |  | — |  |  |
Commodity contracts |  |  |  |  |  |  |
Hedged item | $ | — |  |  | $ | (9) |  |  | $ | — |  |  |
Derivative designated as hedging instrument | — |  |  | 9 |  |  | — |  |  |
Gain (loss) on derivatives designated as fair value hedges |  |  |  |  |  |  |
Fixed-to-floating interest rate swaps |  |  |  |  |  |  |
Hedged item | $ | — |  |  | $ | — |  |  | $ | 51 |  |  |
Derivative designated as hedging instrument | — |  |  | — |  |  | (51) |  |  |
| 2020 |  |
(In millions) | Net sales |  | Cost of products sold |  | Interest expense - net |  |
Amounts from Consolidated Statements of Income | $ | 17,858 |  |  | $ | 12,408 |  |  | $ | 149 |  |  |
Gain (loss) on derivatives designated as cash flow hedges |  |  |  |  |  |  |
Currency exchange contracts |  |  |  |  |  |  |
Hedged item | $ | 13 |  |  | $ | 5 |  |  | $ | — |  |  |
Derivative designated as hedging instrument | (13) |  |  | (5) |  |  | — |  |  |
Commodity contracts |  |  |  |  |  |  |
Hedged item | $ | — |  |  | $ | (1) |  |  | $ | — |  |  |
Derivative designated as hedging instrument | — |  |  | 1 |  |  | — |  |  |
Gain (loss) on derivatives designated as fair value hedges |  |  |  |  |  |  |
Fixed-to-floating interest rate swaps |  |  |  |  |  |  |
Hedged item | $ | — |  |  | $ | — |  |  | $ | (45) |  |  |
Derivative designated as hedging instrument | — |  |  | — |  |  | 45 |  |  |
| 2019 |  |
(In millions) | Net sales |  | Cost of products sold |  | Interest expense - net |  |
Amounts from Consolidated Statements of Income | $ | 21,390 |  |  | $ | 14,338 |  |  | $ | 199 |  |  |
Gain (loss) on derivatives designated as cash flow hedges |  |  |  |  |  |  |
Currency exchange contracts |  |  |  |  |  |  |
Hedged item | $ | 7 |  |  | $ | (12) |  |  | $ | — |  |  |
Derivative designated as hedging instrument | (7) |  |  | 12 |  |  | — |  |  |
Commodity contracts |  |  |  |  |  |  |
Hedged item | $ | — |  |  | $ | — |  |  | $ | — |  |  |
Derivative designated as hedging instrument | — |  |  | — |  |  | — |  |  |
Gain (loss) on derivatives designated as fair value hedges |  |  |  |  |  |  |
Fixed-to-floating interest rate swaps |  |  |  |  |  |  |
Hedged item | $ | — |  |  | $ | — |  |  | $ | (62) |  |  |
Derivative designated as hedging instrument | — |  |  | — |  |  | 62 |  |  |
Schedule of Amounts Recognized in Net Income | The impact of derivatives not designated as hedges to the Consolidated Statements of Income is as follows:
| Gain (loss) recognized in Consolidated Statements of Income |  |  |  | Consolidated Statements of Income classification
(In millions) | 2021 |  | 2020 |  | 2019 |  |  |  |
Gain (loss) on derivatives not designated as hedges |  |  |  |  |  |  |  |  |
Currency exchange contracts | $ | — |  |  | $ | 72 |  |  | $ | 73 |  |  |  |  | Interest expense - net
Commodity Contracts | 11 |  |  | 4 |  |  | — |  |  |  |  | Cost of products sold
Total | $ | 11 |  |  | $ | 76 |  |  | $ | 73 |  |  |  |  |
Schedule of Amounts Recognized in Accumulated Other Comprehensive Income (Loss) | The impact of derivative and non-derivative instruments designated as hedges to the Consolidated Statements of Income and Comprehensive Income is as follows:
| Gain (loss) recognized in other comprehensive (loss) income
(In millions) | 2021 |  | 2020 |  | 2019
Derivatives designated as cash flow hedges |  |  |  |  |
Forward starting floating-to-fixed interest rate swaps | $ | 50 |  |  | $ | (52) |  |  | $ | (36) |
Currency exchange contracts | (6) |  |  | (13) |  |  | 3 |
Commodity contracts | 6 |  |  | 5 |  |  | — |
Non-derivative designated as net investment hedges |  |  |  |  |
Foreign currency denominated debt | 240 |  |  | (173) |  |  | 15 |
Total | $ | 290 |  |  | $ | (233) |  |  | $ | (18) |
| Location of gain (loss) reclassified from Accumulated other comprehensive loss |  | Gain (loss) reclassified from Accumulated other comprehensive loss
(In millions) |  |  | 2021 |  | 2020 |  | 2019
Derivatives designated as cash flow hedges |  |  |  |  |  |  |
Forward starting floating-to-fixed interest rate swaps | Interest expense - net |  | $ | — |  |  | $ | — |  |  | $ | — |
Currency exchange contracts | Net sales and Cost of products sold |  | (6) |  |  | (18) |  |  | 5 |
Commodity contracts | Cost of products sold |  | 9 |  |  | 1 |  |  | — |
Non-derivative designated as net investment hedges |  |  |  |  |  |  |
Foreign currency denominated debt | Interest expense - net |  | — |  |  | — |  |  | — |
Total |  |  | $ | 3 |  |  | $ | (17) |  |  | $ | 5 |

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- Definition Tabular disclosure of pertinent information about a derivative or group of derivatives on a disaggregated basis, such as for individual instruments, or small groups of similar instruments. May include a combination of the type of instrument, risks being hedged, notional amount, hedge designation, related hedged item, inception date, maturity date, or other relevant item. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4B -URI http://asc.fasb.org/extlink&oid=125515794&loc=SL5624163-113959 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=125515794&loc=SL5580258-113959 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=125515794&loc=d3e41620-113959 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=125515794&loc=SL5579245-113959 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=125515794&loc=d3e41638-113959 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 8 -URI http://asc.fasb.org/extlink&oid=125515794&loc=d3e41678-113959 Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 5 -URI http://asc.fasb.org/extlink&oid=125515794&loc=d3e41641-113959 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=125515794&loc=SL5624171-113959 Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=125515794&loc=SL5579240-113959 + Details
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