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Financial Instruments (Tables) | 9 Months Ended
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Oct. 02, 2022
Fair Value Disclosures [Abstract] |
Schedule of Financial Assets and Liabilities Measured At Fair Value On a Recurring Basis | Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis and Fair Value Hierarchy, using a Market Approach:
|  | October 2, 2022 |  |  |  | December 31, 2021
(MILLIONS) |  | Total |  | Level 1 |  | Level 2 |  |  |  | Total |  | Level 1 |  | Level 2
Financial assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Short-term investments |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities with readily determinable fair values: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Money market funds |  | $ | 12,154 |  |  | $ | — |  |  | $ | 12,154 |  |  |  |  | $ | 5,365 |  |  | $ | — |  |  | $ | 5,365 |
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency—non-U.S. |  | 15,885 |  |  | — |  |  | 15,885 |  |  |  |  | 17,318 |  |  | — |  |  | 17,318 |
Government and agency—U.S. |  | 2,931 |  |  | — |  |  | 2,931 |  |  |  |  | 4,050 |  |  | — |  |  | 4,050 |
Corporate and other |  | 1,361 |  |  | — |  |  | 1,361 |  |  |  |  | 647 |  |  | — |  |  | 647 |
|  | 20,176 |  |  | — |  |  | 20,176 |  |  |  |  | 22,014 |  |  | — |  |  | 22,014 |
Total short-term investments |  | 32,330 |  |  | — |  |  | 32,330 |  |  |  |  | 27,379 |  |  | — |  |  | 27,379 |
Other current assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | 9 |  |  | — |  |  | 9 |  |  |  |  | 4 |  |  | — |  |  | 4 |
Foreign exchange contracts |  | 1,950 |  |  | — |  |  | 1,950 |  |  |  |  | 704 |  |  | — |  |  | 704 |
Total other current assets |  | 1,959 |  |  | — |  |  | 1,959 |  |  |  |  | 709 |  |  | — |  |  | 709 |
Long-term investments |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity securities with readily determinable fair values(a) |  | 2,972 |  |  | 2,960 |  |  | 12 |  |  |  |  | 3,876 |  |  | 3,849 |  |  | 27 |
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency—non-U.S. |  | 285 |  |  | — |  |  | 285 |  |  |  |  | 465 |  |  | — |  |  | 465 |
Government and agency—U.S. |  | — |  |  | — |  |  | — |  |  |  |  | 6 |  |  | — |  |  | 6 |
Corporate and other |  | 73 |  |  | — |  |  | 73 |  |  |  |  | 50 |  |  | — |  |  | 50 |
|  | 358 |  |  | — |  |  | 358 |  |  |  |  | 521 |  |  | — |  |  | 521 |
Total long-term investments |  | 3,330 |  |  | 2,960 |  |  | 370 |  |  |  |  | 4,397 |  |  | 3,849 |  |  | 548 |
Other noncurrent assets |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | — |  |  | — |  |  | — |  |  |  |  | 16 |  |  | — |  |  | 16 |
Foreign exchange contracts |  | 812 |  |  | — |  |  | 812 |  |  |  |  | 242 |  |  | — |  |  | 242 |
Total derivative assets |  | 812 |  |  | — |  |  | 812 |  |  |  |  | 259 |  |  | — |  |  | 259 |
Insurance contracts(b) |  | 631 |  |  | — |  |  | 631 |  |  |  |  | 808 |  |  | — |  |  | 808 |
Total other noncurrent assets |  | 1,444 |  |  | — |  |  | 1,444 |  |  |  |  | 1,067 |  |  | — |  |  | 1,067 |
Total assets |  | $ | 39,063 |  |  | $ | 2,960 |  |  | $ | 36,103 |  |  |  |  | $ | 33,552 |  |  | $ | 3,849 |  |  | $ | 29,703 |
Financial liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Other current liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 295 |  |  | $ | — |  |  | $ | 295 |  |  |  |  | $ | 476 |  |  | $ | — |  |  | $ | 476 |
Total other current liabilities |  | 295 |  |  | — |  |  | 295 |  |  |  |  | 476 |  |  | — |  |  | 476 |
Other noncurrent liabilities |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | 330 |  |  | — |  |  | 330 |  |  |  |  | — |  |  | — |  |  | — |
Foreign exchange contracts |  | 1,153 |  |  | — |  |  | 1,153 |  |  |  |  | 405 |  |  | — |  |  | 405 |
Total other noncurrent liabilities |  | 1,482 |  |  | — |  |  | 1,482 |  |  |  |  | 405 |  |  | — |  |  | 405 |
Total liabilities |  | $ | 1,777 |  |  | $ | — |  |  | $ | 1,777 |  |  |  |  | $ | 881 |  |  | $ | — |  |  | $ | 881 |
(a)Long-term equity securities of $139 million as of October 2, 2022 and $194 million as of December 31, 2021 were held in restricted trusts for U.S. non-qualified employee benefit plans. (b)Includes life insurance policies held in restricted trusts for U.S. non-qualified employee benefit plans. The underlying invested assets in these contracts are marketable securities, which are carried at fair value, with changes in fair value recognized in Other (income)/deductions—net (see Note 4).
Investments by Classification Type |
The following summarizes our investments by classification type:
(MILLIONS) |  | October 2, 2022 |  | December 31, 2021
Short-term investments |  |  |  |
Equity securities with readily determinable fair values(a) |  | $ | 12,154 |  |  | $ | 5,365 |
Available-for-sale debt securities |  | 20,176 |  |  | 22,014 |
Held-to-maturity debt securities |  | 2,495 |  |  | 1,746 |
Total Short-term investments |  | $ | 34,825 |  |  | $ | 29,125 |
Long-term investments |  |  |  |
Equity securities with readily determinable fair values(b) |  | $ | 2,972 |  |  | $ | 3,876 |
Available-for-sale debt securities |  | 358 |  |  | 521 |
Held-to-maturity debt securities |  | 36 |  |  | 34 |
Private equity securities at cost(b) |  | 696 |  |  | 623 |
Total Long-term investments |  | $ | 4,062 |  |  | $ | 5,054 |
Equity-method investments |  | 9,826 |  |  | 16,472 |
Total long-term investments and equity-method investments |  | $ | 13,888 |  |  | $ | 21,526 |
Held-to-maturity cash equivalents |  | $ | 969 |  |  | $ | 268 |
(a)Includes money market funds primarily invested in U.S. Treasury and government debt. (b)Represent investments in the life sciences sector.
Schedule of Held-to-maturity Securities |
At October 2, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
|  | October 2, 2022 |  | December 31, 2021
|  |  |  | Gross Unrealized |  |  |  | Maturities (in Years) |  |  |  | Gross Unrealized |  |
(MILLIONS) |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value |  | Within 1 |  | Over 1 to 5 |  | Over 5 |  |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value
Available-for-sale debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency––non-U.S. |  | $ | 16,711 |  |  | $ | 26 |  |  | $ | (567) |  |  | $ | 16,169 |  |  | $ | 15,885 |  |  | $ | 285 |  |  | $ | — |  |  |  | $ | 18,032 |  |  | $ | 13 |  |  | $ | (263) |  |  | $ | 17,783 |
Government and agency––U.S. |  | 2,932 |  |  | — |  |  | (1) |  |  | 2,931 |  |  | 2,931 |  |  | — |  |  | — |  |  |  | 4,056 |  |  | — |  |  | (1) |  |  | 4,055 |
Corporate and other |  | 1,446 |  |  | — |  |  | (12) |  |  | 1,434 |  |  | 1,361 |  |  | 73 |  |  | — |  |  |  | 698 |  |  | — |  |  | (1) |  |  | 697 |
Held-to-maturity debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Time deposits and other |  | 1,557 |  |  | — |  |  | — |  |  | 1,557 |  |  | 1,525 |  |  | 20 |  |  | 12 |  |  |  | 947 |  |  | — |  |  | — |  |  | 947 |
Government and agency––non-U.S. |  | 1,943 |  |  | — |  |  | — |  |  | 1,943 |  |  | 1,939 |  |  | 3 |  |  | 1 |  |  |  | 1,102 |  |  | — |  |  | — |  |  | 1,102 |
Total debt securities |  | $ | 24,589 |  |  | $ | 26 |  |  | $ | (580) |  |  | $ | 24,034 |  |  | $ | 23,641 |  |  | $ | 381 |  |  | $ | 13 |  |  |  | $ | 24,835 |  |  | $ | 14 |  |  | $ | (265) |  |  | $ | 24,584 |
Schedule of Available-for-sale Securities |
At October 2, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
|  | October 2, 2022 |  | December 31, 2021
|  |  |  | Gross Unrealized |  |  |  | Maturities (in Years) |  |  |  | Gross Unrealized |  |
(MILLIONS) |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value |  | Within 1 |  | Over 1 to 5 |  | Over 5 |  |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value
Available-for-sale debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency––non-U.S. |  | $ | 16,711 |  |  | $ | 26 |  |  | $ | (567) |  |  | $ | 16,169 |  |  | $ | 15,885 |  |  | $ | 285 |  |  | $ | — |  |  |  | $ | 18,032 |  |  | $ | 13 |  |  | $ | (263) |  |  | $ | 17,783 |
Government and agency––U.S. |  | 2,932 |  |  | — |  |  | (1) |  |  | 2,931 |  |  | 2,931 |  |  | — |  |  | — |  |  |  | 4,056 |  |  | — |  |  | (1) |  |  | 4,055 |
Corporate and other |  | 1,446 |  |  | — |  |  | (12) |  |  | 1,434 |  |  | 1,361 |  |  | 73 |  |  | — |  |  |  | 698 |  |  | — |  |  | (1) |  |  | 697 |
Held-to-maturity debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Time deposits and other |  | 1,557 |  |  | — |  |  | — |  |  | 1,557 |  |  | 1,525 |  |  | 20 |  |  | 12 |  |  |  | 947 |  |  | — |  |  | — |  |  | 947 |
Government and agency––non-U.S. |  | 1,943 |  |  | — |  |  | — |  |  | 1,943 |  |  | 1,939 |  |  | 3 |  |  | 1 |  |  |  | 1,102 |  |  | — |  |  | — |  |  | 1,102 |
Total debt securities |  | $ | 24,589 |  |  | $ | 26 |  |  | $ | (580) |  |  | $ | 24,034 |  |  | $ | 23,641 |  |  | $ | 381 |  |  | $ | 13 |  |  |  | $ | 24,835 |  |  | $ | 14 |  |  | $ | (265) |  |  | $ | 24,584 |
Contractual Maturities of Available-for-sale and Held-to-maturity Debt Securities |
At October 2, 2022, our investment portfolio consisted of debt securities issued across diverse governments, corporate and financial institutions, which are investment-grade. The contractual or estimated maturities, are as follows:
|  | October 2, 2022 |  | December 31, 2021
|  |  |  | Gross Unrealized |  |  |  | Maturities (in Years) |  |  |  | Gross Unrealized |  |
(MILLIONS) |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value |  | Within 1 |  | Over 1 to 5 |  | Over 5 |  |  | Amortized Cost |  | Gains |  | Losses |  | Fair Value
Available-for-sale debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Government and agency––non-U.S. |  | $ | 16,711 |  |  | $ | 26 |  |  | $ | (567) |  |  | $ | 16,169 |  |  | $ | 15,885 |  |  | $ | 285 |  |  | $ | — |  |  |  | $ | 18,032 |  |  | $ | 13 |  |  | $ | (263) |  |  | $ | 17,783 |
Government and agency––U.S. |  | 2,932 |  |  | — |  |  | (1) |  |  | 2,931 |  |  | 2,931 |  |  | — |  |  | — |  |  |  | 4,056 |  |  | — |  |  | (1) |  |  | 4,055 |
Corporate and other |  | 1,446 |  |  | — |  |  | (12) |  |  | 1,434 |  |  | 1,361 |  |  | 73 |  |  | — |  |  |  | 698 |  |  | — |  |  | (1) |  |  | 697 |
Held-to-maturity debt securities |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Time deposits and other |  | 1,557 |  |  | — |  |  | — |  |  | 1,557 |  |  | 1,525 |  |  | 20 |  |  | 12 |  |  |  | 947 |  |  | — |  |  | — |  |  | 947 |
Government and agency––non-U.S. |  | 1,943 |  |  | — |  |  | — |  |  | 1,943 |  |  | 1,939 |  |  | 3 |  |  | 1 |  |  |  | 1,102 |  |  | — |  |  | — |  |  | 1,102 |
Total debt securities |  | $ | 24,589 |  |  | $ | 26 |  |  | $ | (580) |  |  | $ | 24,034 |  |  | $ | 23,641 |  |  | $ | 381 |  |  | $ | 13 |  |  |  | $ | 24,835 |  |  | $ | 14 |  |  | $ | (265) |  |  | $ | 24,584 |
Schedule of Gains and Losses on Investment Securities |
The following presents the calculation of the portion of unrealized (gains)/losses that relates to equity securities, excluding equity-method investments, held at the reporting date:
|  | Three Months Ended |  | Nine Months Ended
(MILLIONS) |  | October 2, 2022 |  | October 3, 2021 |  | October 2, 2022 |  | October 3, 2021
Net (gains)/losses recognized during the period on equity securities(a) |  | $ | 112 |  |  | $ | (400) |  |  | $ | 1,353 |  |  | $ | (1,601) |
Less: Net (gains)/losses recognized during the period on equity securities sold during the period |  | (5) |  |  | (78) |  |  | (84) |  |  | (83) |
Net unrealized (gains)/losses during the reporting period on equity securities still held at the reporting date(b) |  | $ | 116 |  |  | $ | (322) |  |  | $ | 1,436 |  |  | $ | (1,518) |
(a)Reported in Other (income)/deductions––net. See Note 4. (b)Included in net unrealized (gains)/losses are observable price changes on equity securities without readily determinable fair values. As of October 2, 2022, there were cumulative impairments and downward adjustments of $148 million and upward adjustments of $201 million. Impairments, downward and upward adjustments were not significant in the third quarter and first nine months of 2022 and 2021.
Schedule of Short-term Borrowings |
Short-term borrowings include:
(MILLIONS) |  | October 2, 2022 |  | December 31, 2021
Current portion of long-term debt, principal amount |  | $ | 2,550 |  |  | $ | 1,636 |
Other short-term borrowings, principal amount(a) |  | 1,474 |  |  | 605 |
Total short-term borrowings, principal amount |  | 4,024 |  |  | 2,241 |
Net fair value adjustments related to hedging and purchase accounting |  | 16 |  |  | — |
Total Short-term borrowings, including current portion of long-term debt, carried at historical proceeds, as adjusted |  | $ | 4,040 |  |  | $ | 2,241 |
(a)Primarily includes cash collateral. See Note 7F.
Schedule of Principal Amounts of Senior Unsecured Long-Term Debt and Adjustments |
The following summarizes the aggregate principal amount of our senior unsecured long-term debt, and adjustments to report our aggregate long-term debt:
(MILLIONS) |  | October 2, 2022 |  | December 31, 2021
Total long-term debt, principal amount |  | $ | 31,831 |  |  | $ | 34,948 |
Net fair value adjustments related to hedging and purchase accounting |  | 976 |  |  | 1,438 |
Net unamortized discounts, premiums and debt issuance costs |  | (178) |  |  | (195) |
Other long-term debt |  | — |  |  | 4 |
Total long-term debt, carried at historical proceeds, as adjusted |  | $ | 32,629 |  |  | $ | 36,195 |
Schedule of Derivative Instruments |
The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
|  | October 2, 2022 |  | December 31, 2021
|  |  |  | Fair Value |  |  |  | Fair Value
(MILLIONS) |  | Notional |  | Asset |  | Liability |  | Notional |  | Asset |  | Liability
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts(a) |  | $ | 33,274 |  |  | $ | 2,479 |  |  | $ | 1,175 |  |  | $ | 29,576 |  |  | $ | 787 |  |  | $ | 717 |
Interest rate contracts |  | 2,250 |  |  | 9 |  |  | 330 |  |  | 2,250 |  |  | 21 |  |  | — |
|  |  |  | 2,488 |  |  | 1,505 |  |  |  |  | 808 |  |  | 717 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 26,426 |  |  | 283 |  |  | 273 |  |  | $ | 21,419 |  |  | 160 |  |  | 164 |
Total |  |  |  | $ | 2,771 |  |  | $ | 1,777 |  |  |  |  | $ | 968 |  |  | $ | 881 |
(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.5 billion as of October 2, 2022 and $4.8 billion as of December 31, 2021.
Schedule of Derivative Assets |
The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
|  | October 2, 2022 |  | December 31, 2021
|  |  |  | Fair Value |  |  |  | Fair Value
(MILLIONS) |  | Notional |  | Asset |  | Liability |  | Notional |  | Asset |  | Liability
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts(a) |  | $ | 33,274 |  |  | $ | 2,479 |  |  | $ | 1,175 |  |  | $ | 29,576 |  |  | $ | 787 |  |  | $ | 717 |
Interest rate contracts |  | 2,250 |  |  | 9 |  |  | 330 |  |  | 2,250 |  |  | 21 |  |  | — |
|  |  |  | 2,488 |  |  | 1,505 |  |  |  |  | 808 |  |  | 717 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 26,426 |  |  | 283 |  |  | 273 |  |  | $ | 21,419 |  |  | 160 |  |  | 164 |
Total |  |  |  | $ | 2,771 |  |  | $ | 1,777 |  |  |  |  | $ | 968 |  |  | $ | 881 |
(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.5 billion as of October 2, 2022 and $4.8 billion as of December 31, 2021.
Schedule of Derivative Liabilities |
The following summarizes the fair value of the derivative financial instruments and notional amounts (including those reported as part of discontinued operations):
|  | October 2, 2022 |  | December 31, 2021
|  |  |  | Fair Value |  |  |  | Fair Value
(MILLIONS) |  | Notional |  | Asset |  | Liability |  | Notional |  | Asset |  | Liability
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts(a) |  | $ | 33,274 |  |  | $ | 2,479 |  |  | $ | 1,175 |  |  | $ | 29,576 |  |  | $ | 787 |  |  | $ | 717 |
Interest rate contracts |  | 2,250 |  |  | 9 |  |  | 330 |  |  | 2,250 |  |  | 21 |  |  | — |
|  |  |  | 2,488 |  |  | 1,505 |  |  |  |  | 808 |  |  | 717 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | $ | 26,426 |  |  | 283 |  |  | 273 |  |  | $ | 21,419 |  |  | 160 |  |  | 164 |
Total |  |  |  | $ | 2,771 |  |  | $ | 1,777 |  |  |  |  | $ | 968 |  |  | $ | 881 |
(a)The notional amount of outstanding foreign exchange contracts hedging our intercompany forecasted inventory sales was $4.5 billion as of October 2, 2022 and $4.8 billion as of December 31, 2021.
Information about Gains/(Losses) Incurred to Hedge or Offset Operational Foreign Exchange or Interest Rate Risk |
The following summarizes information about the gains/(losses) incurred to hedge or offset operational foreign exchange or interest rate risk exposures (including those reported as part of discontinued operations):
|  | Gains/(Losses) Recognized in OID(a) |  | Gains/(Losses) Recognized in OCI(a) |  | Gains/(Losses) Reclassified from OCI into OID and COS(a)
|  | Three Months Ended
(MILLIONS) |  | October 2, 2022 |  | October 3, 2021 |  | October 2, 2022 |  | October 3, 2021 |  | October 2, 2022 |  | October 3, 2021
Derivative Financial Instruments in Cash Flow Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts(b) |  | $ | — |  |  | $ | — |  |  | $ | 528 |  |  | $ | 204 |  |  | $ | 558 |  |  | $ | (59) |
Amount excluded from effectiveness testing and amortized into earnings(c) |  | — |  |  | — |  |  | 61 |  |  | 10 |  |  | 57 |  |  | 10 |
Derivative Financial Instruments in Fair Value Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | (124) |  |  | (5) |  |  | — |  |  | — |  |  | — |  |  | — |
Hedged item |  | 124 |  |  | 5 |  |  | — |  |  | — |  |  | — |  |  | — |
Derivative Financial Instruments in Net Investment Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | — |  |  | — |  |  | 680 |  |  | 177 |  |  | — |  |  | — |
Amount excluded from effectiveness testing and amortized into earnings(c) |  | — |  |  | — |  |  | 78 |  |  | 19 |  |  | 32 |  |  | 26 |
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d) |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency short-term borrowings |  | — |  |  | — |  |  | — |  |  | 25 |  |  | — |  |  | — |
Foreign currency long-term debt |  | — |  |  | — |  |  | 49 |  |  | 19 |  |  | — |  |  | — |
Derivative Financial Instruments Not Designated as Hedges: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | (420) |  |  | (74) |  |  | — |  |  | — |  |  | — |  |  | — |
All other net(c) |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
|  | $ | (420) |  |  | $ | (74) |  |  | $ | 1,396 |  |  | $ | 453 |  |  | $ | 647 |  |  | $ | (21) |
|  | Gains/(Losses) Recognized in OID(a) |  | Gains/(Losses) Recognized in OCI(a) |  | Gains/(Losses) Reclassified from OCI into OID and COS(a)
|  | Nine Months Ended
(MILLIONS) |  | October 2, 2022 |  | October 3, 2021 |  | October 2, 2022 |  | October 3, 2021 |  | October 2, 2022 |  | October 3, 2021
Derivative Financial Instruments in Cash Flow Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts(b) |  | $ | — |  |  | $ | — |  |  | $ | 1,339 |  |  | $ | 147 |  |  | $ | 872 |  |  | $ | (314) |
Amount excluded from effectiveness testing and amortized into earnings(c) |  | — |  |  | — |  |  | 105 |  |  | 31 |  |  | 100 |  |  | 28 |
Derivative Financial Instruments in Fair Value Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |
Interest rate contracts |  | (346) |  |  | (6) |  |  | — |  |  | — |  |  | — |  |  | — |
Hedged item |  | 346 |  |  | 6 |  |  | — |  |  | — |  |  | — |  |  | — |
Derivative Financial Instruments in Net Investment Hedge Relationships: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | — |  |  | — |  |  | 1,613 |  |  | 332 |  |  | — |  |  | — |
Amount excluded from effectiveness testing and amortized into earnings(c) |  | — |  |  | — |  |  | 63 |  |  | 54 |  |  | 95 |  |  | 82 |
Non-Derivative Financial Instruments in Net Investment Hedge Relationships:(d) |  |  |  |  |  |  |  |  |  |  |  |
Foreign currency short-term borrowings |  | — |  |  | — |  |  | 26 |  |  | 52 |  |  | — |  |  | — |
Foreign currency long-term debt |  | — |  |  | — |  |  | 119 |  |  | 66 |  |  | — |  |  | — |
Derivative Financial Instruments Not Designated as Hedges: |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange contracts |  | (832) |  |  | (97) |  |  | — |  |  | — |  |  | — |  |  | — |
All other net(c) |  | — |  |  | — |  |  | — |  |  | 1 |  |  | — |  |  | 1 |
|  | $ | (832) |  |  | $ | (97) |  |  | $ | 3,264 |  |  | $ | 683 |  |  | $ | 1,068 |  |  | $ | (204) |
(a)OID = Other (income)/deductions—net, included in Other (income)/deductions—net in the condensed consolidated statements of income. COS = Cost of Sales, included in Cost of sales in the condensed consolidated statements of income. OCI = Other comprehensive income/(loss), included in the condensed consolidated statements of comprehensive income. (b)The amounts reclassified from OCI into COS were: •a net gain of $125 million in the third quarter of 2022; •a net gain of $227 million in the first nine months of 2022; •a net loss of $18 million in the third quarter of 2021; and •a net loss of $94 million in the first nine months of 2021. The remaining amounts were reclassified from OCI into OID. Based on quarter-end foreign exchange rates that are subject to change, we expect to reclassify a pre-tax gain of $1 billion within the next 12 months into income. The maximum length of time over which we are hedging our exposure to the variability in future foreign exchange cash flows is approximately 21 years and relates to foreign currency debt. (c)The amounts reclassified from OCI were reclassified into OID. (d)Short-term borrowings and long-term debt include foreign currency borrowings, which are used in net investment hedges. The related short-term borrowings’ carrying value as of December 31, 2021 was $1.1 billion. The related long-term debt carrying values as of October 2, 2022 and December 31, 2021 were $726 million and $844 million, respectively.
Schedule of Total Amount of Each Income and Expense Line in which Results of Fair Value Hedges are Recorded |
The following summarizes cumulative basis adjustments to our debt in fair value hedges:
|  | October 2, 2022 |  | December 31, 2021
|  |  |  | Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount |  |  |  | Cumulative Amount of Fair Value Hedging Adjustment Increase/(Decrease) to Carrying Amount
(MILLIONS) |  | Carrying Amount of Hedged Assets/Liabilities(a) |  | Active Hedging Relationships |  | Discontinued Hedging Relationships |  | Carrying Amount of Hedged Assets/Liabilities(a) |  | Active Hedging Relationships |  | Discontinued Hedging Relationships
Short-term borrowings, including current portion of long-term debt |  | $ | — |  |  | $ | — |  |  | $ | 16 |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Long-term debt |  | $ | 2,235 |  |  | $ | (330) |  |  | $ | 1,061 |  |  | $ | 2,233 |  |  | $ | 16 |  |  | $ | 1,154 |
(a)Carrying amounts exclude the cumulative amount of fair value hedging adjustments.

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