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Financial Instruments (Tables) | 6 Months Ended
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Jun. 30, 2014
Fair Value of Derivatives Instruments | Derivative instruments were recorded at fair value in the condensed consolidated balance sheets as of June 30, 2014 and December 31, 2013 as follows:
|  | June 30, 2014 |  |  | December 31, 2013 |
|  | Asset |  |  | Liability |  |  | Asset |  |  | Liability |
|  | Derivatives |  |  | Derivatives |  |  | Derivatives |  |  | Derivatives |
|  | (in millions) |
Derivatives designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency exchange contracts |  | $ | 5 |  |  | $ | 3 |  |  | $ | 3 |  |  | $ | 11 |
Commodity contracts |  |  | 8 |  |  |  | 18 |  |  |  | 2 |  |  |  | 3 |
Interest rate contracts |  |  | 98 |  |  |  | – |  |  |  | 209 |  |  |  | – |
|  | $ | 111 |  |  | $ | 21 |  |  | $ | 214 |  |  | $ | 14 |
Derivatives not designated as hedging instruments: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency exchange contracts |  | $ | 29 |  |  | $ | 56 |  |  | $ | 84 |  |  | $ | 8 |
Commodity contracts |  |  | 94 |  |  |  | 68 |  |  |  | 60 |  |  |  | 51 |
Interest rate contracts |  |  | 60 |  |  |  | 35 |  |  |  | 64 |  |  |  | 38 |
|  | $ | 183 |  |  | $ | 159 |  |  | $ | 208 |  |  | $ | 97 |
Total fair value |  | $ | 294 |  |  | $ | 180 |  |  | $ | 422 |  |  | $ | 111 |
Notional Values of Derivative Instruments | The net notional values of our derivative instruments as of June 30, 2014 and December 31, 2013 were:
|  | Notional Amount |
|  | June 30, |  |  | December 31, |
|  | 2014 |  |  | 2013 |
|  | (in millions) |
Currency exchange contracts: |  |  |  |  |  |  |  |
Intercompany loans and forecasted interest payments |  | $ | 6,037 |  |  | $ | 4,369 |
Forecasted transactions |  |  | 7,533 |  |  |  | 2,565 |
Commodity contracts |  |  | 802 |  |  |  | 805 |
Interest rate contracts |  |  | 4,041 |  |  |  | 2,273 |
Net investment hedge – euro notes |  |  | 4,450 |  |  |  | 4,466 |
Net investment hedge – pound sterling notes |  |  | 1,112 |  |  |  | 1,076 |
Hedges of Net Investments in International Operations |
Hedges of Net Investments in International Operations: After-tax gains / (losses) related to hedges of net investments in international operations in the form of euro and pound sterling-denominated debt were:
|  | For the Three Months Ended |  |  | For the Six Months Ended |  |  | Location of Gain / (Loss) Recognized in AOCI
|  | June 30, |  |  | June 30, |  |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |  |
|  | (in millions) |  |  |
Euro notes |  | $ | 5 |  |  | $ | (10 | ) |  | $ | – |  |  | $ | 10 |  |  | Currency Translation
Pound sterling notes |  |  | (19 | ) |  |  | (1 | ) |  |  | (23 | ) |  |  | 43 |  |  | Adjustment
Derivative |
Schedule of Derivative Instruments Fair Value and Measurement Inputs | The fair values (asset / (liability)) of our derivative instruments at June 30, 2014 were determined using:
|  |  |  |  | Quoted Prices in |  |  |  |  |  |  |
|  |  |  |  | Active Markets |  |  | Significant |  |  | Significant |
|  | Total |  |  | for Identical |  |  | Other Observable |  |  | Unobservable |
|  | Fair Value of Net |  |  | Assets |  |  | Inputs |  |  | Inputs |
|  | Asset / (Liability) |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
|  | (in millions) |
Currency exchange contracts |  | $ | (25 | ) |  | $ | – |  |  | $ | (25 | ) |  | $ | – |
Commodity contracts |  |  | 16 |  |  |  | 1 |  |  |  | 15 |  |  |  | – |
Interest rate contracts |  |  | 123 |  |  |  | – |  |  |  | 123 |  |  |  | – |
Total derivatives |  | $ | 114 |  |  | $ | 1 |  |  | $ | 113 |  |  | $ | – |
The fair values (asset / (liability)) of our derivative instruments at December 31, 2013 were determined using:
|  |  |  |  | Quoted Prices in |  |  |  |  |  |  |
|  |  |  |  | Active Markets |  |  | Significant |  |  | Significant |
|  | Total |  |  | for Identical |  |  | Other Observable |  |  | Unobservable |
|  | Fair Value of Net |  |  | Assets |  |  | Inputs |  |  | Inputs |
|  | Asset / (Liability) |  |  | (Level 1) |  |  | (Level 2) |  |  | (Level 3) |
|  | (in millions) |
Currency exchange contracts |  | $ | 68 |  |  | $ | – |  |  | $ | 68 |  |  | $ | – |
Commodity contracts |  |  | 8 |  |  |  | (4 | ) |  |  | 12 |  |  |  | – |
Interest rate contracts |  |  | 235 |  |  |  | – |  |  |  | 235 |  |  |  | – |
Total derivatives |  | $ | 311 |  |  | $ | (4 | ) |  | $ | 315 |  |  | $ | – |
Cash Flow Hedges |
Schedule of Cash Flow Hedges Effect on Accumulated Other Comprehensive Income, Net of Taxes | Cash flow hedge activity, net of taxes, within accumulated other comprehensive earnings / (losses) included:
|  | For the Three Months Ended |  |  | For the Six Months Ended |
| June 30, |  |  | June 30, |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
|  | (in millions) |
Accumulated gain / (loss) at beginning of period |  | $ | 82 |  |  | $ | – |  |  | $ | 117 |  |  | $ | (38 | )
Transfer of realized losses / (gains) in fair value to earnings |  |  | (2 | ) |  |  | 15 |  |  |  | (3 | ) |  |  | 32 |
Unrealized gain / (loss) in fair value |  |  | (36 | ) |  |  | 57 |  |  |  | (70 | ) |  |  | 78 |
Accumulated gain / (loss) at end of period |  | $ | 44 |  |  | $ | 72 |  |  | $ | 44 |  |  | $ | 72 |
Schedule of Effects of Derivative Instruments | After-tax gains / (losses) reclassified from accumulated other comprehensive earnings / (losses) into net earnings were:
|  | For the Three Months Ended |  |  | For the Six Months Ended |
| June 30, |  |  | June 30, |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
|  | (in millions) |
Currency exchange contracts – forecasted transactions |  | $ | (2 | ) |  | $ | (4 | ) |  | $ | (4 | ) |  | $ | (12 | )
Commodity contracts |  |  | 4 |  |  |  | (10 | ) |  |  | 9 |  |  |  | (19 | )
Interest rate contracts |  |  | – |  |  |  | (1 | ) |  |  | (2 | ) |  |  | (1 | )
Total |  | $ | 2 |  |  | $ | (15 | ) |  | $ | 3 |  |  | $ | (32 | )
After-tax gains / (losses) recognized in other comprehensive earnings / (losses) were:
|  | For the Three Months Ended |  |  | For the Six Months Ended |
| June 30, |  |  | June 30, |
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |
|  | (in millions) |
Currency exchange contracts – forecasted transactions |  | $ | 5 |  |  | $ | (2 | ) |  | $ | 7 |  |  | $ | 4 |
Commodity contracts |  |  | (8 | ) |  |  | (4 | ) |  |  | 3 |  |  |  | (8 | )
Interest rate contracts |  |  | (33 | ) |  |  | 63 |  |  |  | (80 | ) |  |  | 82 |
Total |  | $ | (36 | ) |  | $ | 57 |  |  | $ | (70 | ) |  | $ | 78 |
Fair Value Hedges |
Schedule of Effects of Derivative Instruments | Fair Value Hedges: Pre-tax gains / (losses) due to changes in fair value of our interest rate swaps and related hedged long-term debt were recorded in interest and other expense, net:
|  | For the Three and Six Months Ended June 30, |
|  | 2014 |  |  | 2013 |
|  | (in millions) |
Derivatives |  | $ | 14 |  |  | $ | – |
Borrowings |  |  | (14 | ) |  |  | – |
Economic Hedging |
Schedule of Effects of Derivative Instruments | Pre-tax gains / (losses) recorded in net earnings for economic hedges which are not designated as hedging instruments were:
|  |  |  |  |  |  |  |  |  |  |  |  |  | Location of
|  | For the Three Months Ended |  |  | For the Six Months Ended |  |  | Gain / (Loss)
|  | June 30, |  |  | June 30, |  |  | Recognized
|  | 2014 |  |  | 2013 |  |  | 2014 |  |  | 2013 |  |  | in Earnings
|  | (in millions) |  |  |
Currency exchange contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intercompany loans and forecasted interest payments |  | $ | 3 |  |  | $ | (17 | ) |  | $ | 1 |  |  | $ | 3 |  |  | Interest expense
Forecasted purchases |  |  | (30 | ) |  |  | 38 |  |  |  | (40 | ) |  |  | 26 |  |  | Cost of sales
Forecasted transactions |  |  | (9 | ) |  |  | – |  |  |  | (14 | ) |  |  | – |  |  | Interest expense
Forecasted transactions |  |  | (2 | ) |  |  | 4 |  |  |  | (3 | ) |  |  | 3 |  |  | Selling, general and administrative expenses
Interest rate contracts |  |  | 1 |  |  |  | – |  |  |  | 1 |  |  |  | (2 | ) |  | Interest expense
Commodity contracts |  |  | 32 |  |  |  | 17 |  |  |  | 70 |  |  |  | 34 |  |  | Cost of sales
Total |  | $ | (5 | ) |  | $ | 42 |  |  | $ | 15 |  |  | $ | 64 |  |  |

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- Definition Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 820 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=25499696&loc=d3e19207-110258 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 10 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13433-108611 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13467-108611 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=28364263&loc=d3e13476-108611 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 50 -Paragraph 30 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6957238&loc=d3e14172-108612 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 825 -SubTopic 10 -Section 45 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6447952&loc=d3e13220-108610 + Details
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- Definition Tabular disclosure of the effective portion of gains and losses on derivative instruments (and nonderivative instruments) designated and qualifying in cash flow hedges recorded in accumulated other comprehensive income (loss) during the term of the hedging relationship and reclassified into earnings during the current period. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 + Details
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- Definition Tabular disclosure of the location and amount of derivative instruments and nonderivative instruments designated as hedging instruments reported before netting adjustments, and the amount of gain (loss) on derivative instruments and nonderivative instruments designated and qualified as hedging instruments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4A -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5618551-113959 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 815 -SubTopic 10 -Section 50 -Paragraph 4C -URI http://asc.fasb.org/extlink&oid=7476318&loc=SL5624171-113959 + Details
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