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Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2014
Fair Value of Derivatives Instruments

Derivative instruments were recorded at fair value in the consolidated balance sheets as follows:

 

                                                                           
     As of December 31,  
     2014      2013  
     Asset      Liability      Asset      Liability  
     Derivatives      Derivatives      Derivatives      Derivatives  
     (in millions)  

Derivatives designated as accounting hedges:

            

Currency exchange contracts

    $ 69       $ 17       $ 3       $ 11   

Commodity contracts

      12         33         2         3   

Interest rate contracts

      13         42         209         –   
  

 

 

     

 

 

     

 

 

     

 

 

  
$ 94    $ 92    $ 214    $ 14   
  

 

 

     

 

 

     

 

 

     

 

 

  

Derivatives not designated as accounting hedges:

Currency exchange contracts

 $ 735    $ 24    $ 84    $ 8   

Commodity contracts

   90      194      60      51   

Interest rate contracts

   59      39      64      38   
  

 

 

     

 

 

     

 

 

     

 

 

  
$ 884    $ 257    $ 208    $ 97   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total fair value

 $ 978    $ 349    $ 422    $ 111   
  

 

 

     

 

 

     

 

 

     

 

 

  
Notional Values of Derivative Instruments

The net notional values of our derivative instruments were:

 

     Notional Amount  
     As of December 31,  
     2014      2013  
     (in millions)  

Currency exchange contracts:

      

Intercompany loans and forecasted interest payments

    $   3,640       $   4,369   

Forecasted transactions

      6,681         2,565   

Commodity contracts

      1,569         805   

Interest rate contracts

      3,970         2,273   

Net investment hedge – euro notes

      3,932         4,466   

Net investment hedge – pound sterling notes

      545         1,076   

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:

 

                                                                           
                          Location of
     For the Years Ended December 31,      Gain / (Loss)
     2014      2013      2012      Recognized in AOCI
            (in millions)              

Euro notes

    $ 328       $ (50 )     $ (41 )     Currency Translation

Pound sterling notes

      39         (13 )       (29 )     Adjustment
Derivative  
Schedule of Derivative Instruments Fair Value and Measurement Inputs

The fair values (asset / (liability)) of our derivative instruments were determined using:

 

                                                                           
     As of December 31, 2014  
            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

    $ 763       $ –       $ 763       $ –   

Commodity contracts

      (125 )       (49 )       (76 )       –   

Interest rate contracts

      (9 )       –         (9 )       –   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total derivatives

 $ 629    $ (49 )  $ 678    $ –   
  

 

 

     

 

 

     

 

 

     

 

 

  
     As of December 31, 2013  
            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 Years Ended December 31,  
     2014      2013      2012  
     (in millions)  

Accumulated gain / (loss) at January 1

    $  117       $ (38 )     $ (297 ) 

Transfer of realized (gains) / losses to earnings

      (40 )       53         312   

Unrealized gain / (loss)

      (79 )       102         (75 ) 

Discontinued operations

      –         –         (134 ) 

Impact of Spin-Off

      –         –         156   
  

 

 

     

 

 

     

 

 

  

Accumulated gain / (loss) at December 31

 $ (2 )  $  117    $ (38 ) 
  

 

 

     

 

 

     

 

 

  
Schedule of Effects of Derivative Instruments

After-tax gains / (losses) reclassified from accumulated other comprehensive earnings / (losses) into net earnings were:

 

     For the Years Ended December 31,  
     2014      2013      2012  
     (in millions)  

Currency exchange contracts - forecasted transactions

    $ 26       $ (26 )     $ 58   

Commodity contracts

      16         (23 )       (10 ) 

Interest rate contracts

      (2 )       (4 )       (360 ) 
  

 

 

     

 

 

     

 

 

  

Total

 $    40    $   (53 )  $ (312 ) 
  

 

 

     

 

 

     

 

 

  

After-tax gains / (losses) recognized in other comprehensive earnings / (losses) were:

 

     For the Years Ended December 31,  
     2014      2013      2012  
     (in millions)  

Currency exchange contracts - forecasted transactions

    $ 82       $ (23 )     $   (16 ) 

Commodity contracts

      (2 )       3         (24 ) 

Interest rate contracts

      (159 )       122         (35 ) 
  

 

 

     

 

 

     

 

 

  

Total

 $ (79 )  $  102    $ 75   
  

 

 

     

 

 

     

 

 

  

 

Pre-tax gains / (losses) on ineffectiveness recognized in net earnings from continuing operations were:

 

     For the Years Ended December 31,  
     2014      2013      2012  
     (in millions)  

Commodity contracts

    $ (10 )     $ 1       $ (3 ) 

Interest rate contracts

      –         –         (23 ) 
  

 

 

     

 

 

     

 

 

  

Total

 $ (10 )  $ 1    $ (26 ) 
  

 

 

     

 

 

     

 

 

  
Economic Hedging  
Schedule of Effects of Derivative Instruments

Pre-tax gains / (losses) recorded in net earnings for economic hedges were:

 

     For the Years Ended December 31,      Location of
Gain / (Loss)
Recognized
in Earnings
     2014      2013      2012     
     (in millions)       

Currency exchange contracts:

            

Intercompany loans and forecasted interest payments

    $ 4       $ 18       $ 24       Interest and other
expense, net

Forecasted transactions

      29         65         7       Cost of sales

Forecasted transactions

      610         9         (17 )     Interest and other
expense, net

Forecasted transactions

      (4 )       4         –       Selling, general
and administrative
expenses

Interest rate contracts

      –         –         3       Interest and other
expense, net

Commodity contracts

      (136 )       (40 )       (49 )     Cost of sales
  

 

 

     

 

 

     

 

 

     

Total

    $ 503       $ 56       $ (32 )    
  

 

 

     

 

 

     

 

 

     
Fair Value Hedges  
Schedule of Effects of Derivative Instruments

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 Years Ended December 31,  
     2014      2013      2012  
            (in millions)         

Derivatives

    $ 13       $ –       $ (2 ) 

Borrowings

      (13 )       –         2