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Financial Instruments (Tables) | 6 Months Ended
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Jun. 30, 2015
Fair Value of Derivatives Instruments | Derivative instruments were recorded at fair value in the consolidated balance sheets as follows:
|  | As of June 30, 2015 |  |  | As of December 31, 2014 |
|  | Asset Derivatives |  |  | Liability Derivatives |  |  | Asset Derivatives |  |  | Liability Derivatives |
|  | (in millions) |
Derivatives designated as accounting hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency exchange contracts |  | $ | 25 |  |  | $ | 26 |  |  | $ | 69 |  |  | $ | 17 |
Commodity contracts |  |  | 43 |  |  |  | 85 |  |  |  | 12 |  |  |  | 33 |
Interest rate contracts |  |  | 19 |  |  |  | 8 |  |  |  | 13 |  |  |  | 42 |
|  | $ | 87 |  |  | $ | 119 |  |  | $ | 94 |  |  | $ | 92 |
Derivatives not designated as accounting hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency exchange contracts |  | $ | 66 |  |  | $ | 247 |  |  | $ | 735 |  |  | $ | 24 |
Commodity contracts |  |  | 107 |  |  |  | 72 |  |  |  | 90 |  |  |  | 194 |
Interest rate contracts |  |  | 51 |  |  |  | 33 |  |  |  | 59 |  |  |  | 39 |
|  | $ | 224 |  |  | $ | 352 |  |  | $ | 884 |  |  | $ | 257 |
Total fair value |  | $ | 311 |  |  | $ | 471 |  |  | $ | 978 |  |  | $ | 349 |
Notional Values of Derivative Instruments | The net notional values of our derivative instruments were:
|  | Notional Amount |
|  | As of June 30, |  |  | As of December 31, |
|  | 2015 |  |  | 2014 |
|  | (in millions) |
Currency exchange contracts: |  |  |  |  |  |  |  |
Intercompany loans and forecasted interest payments |  | $ | 5,680 |  |  | $ | 3,640 |
Forecasted transactions |  |  | 7,762 |  |  |  | 6,681 |
Commodity contracts |  |  | 2,903 |  |  |  | 1,569 |
Interest rate contracts |  |  | 3,078 |  |  |  | 3,970 |
Net investment hedge – euro notes |  |  | 4,459 |  |  |  | 3,932 |
Net investment hedge – pound sterling notes |  |  | 1,257 |  |  |  | 545 |
Net investment hedge – Swiss franc notes |  |  | 722 |  |  |  | – |
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, pound sterling and Swiss franc-denominated debt were:
|  | For the Three Months Ended June 30, |  |  | For the Six Months Ended June 30, |  |  | Location of Gain / (Loss) Recognized in AOCI
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |  |
|  | (in millions) |  |  |
Euro notes |  | $ | (118 | ) |  | $ | 5 |  |  | $ | 196 |  |  | $ | – |  |  | Currency
Pound sterling notes |  |  | (45 | ) |  |  | (19 | ) |  |  | (13 | ) |  |  | (23 | ) |  | Translation
Swiss franc notes |  |  | (17 | ) |  |  | – |  |  |  | (30 | ) |  |  | – |  |  | 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 June 30, 2015 |
|  | Total Fair Value of Net Asset / (Liability) |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
|  | (in millions) |
Currency exchange contracts |  | $ | (182 | ) |  | $ | – |  |  | $ | (182 | ) |  | $ | – |
Commodity contracts |  |  | (7 | ) |  |  | (10 | ) |  |  | 3 |  |  |  | – |
Interest rate contracts |  |  | 29 |  |  |  | – |  |  |  | 29 |  |  |  | – |
Total derivatives |  | $ | (160 | ) |  | $ | (10 | ) |  | $ | (150 | ) |  | $ | – |
|  | As of December 31, 2014 |
|  | Total Fair Value of Net Asset / (Liability) |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
|  | (in millions) |
Currency exchange contracts |  | $ | 763 |  |  | $ | – |  |  | $ | 763 |  |  | $ | – |
Commodity contracts |  |  | (125 | ) |  |  | (49 | ) |  |  | (76 | ) |  |  | – |
Interest rate contracts |  |  | (9 | ) |  |  | – |  |  |  | (9 | ) |  |  | – |
Total derivatives |  | $ | 629 |  |  | $ | (49 | ) |  | $ | 678 |  |  | $ | – |
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, |
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
|  | (in millions) |
Accumulated gain / (loss) at beginning of period |  | $ | (46 | ) |  | $ | 82 |  |  | $ | (2 | ) |  | $ | 117 |
Transfer of realized losses / (gains) in fair value to earnings |  |  | (36 | ) |  |  | (2 | ) |  |  | (54 | ) |  |  | (3 | )
Unrealized gain / (loss) in fair value |  |  | 29 |  |  |  | (36 | ) |  |  | 3 |  |  |  | (70 | )
Accumulated gain / (loss) at end of period |  | $ | (53 | ) |  | $ | 44 |  |  | $ | (53 | ) |  | $ | 44 |
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, |
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
|  | (in millions) |
Currency exchange contracts – forecasted transactions |  | $ | 38 |  |  | $ | (2 | ) |  | $ | 84 |  |  | $ | (4 | )
Commodity contracts |  |  | (2 | ) |  |  | 4 |  |  |  | (4 | ) |  |  | 9 |
Interest rate contracts |  |  | – |  |  |  | – |  |  |  | (26 | ) |  |  | (2 | )
Total |  | $ | 36 |  |  | $ | 2 |  |  | $ | 54 |  |  | $ | 3 |
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, |
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
|  | (in millions) |
Currency exchange contracts – forecasted transactions |  | $ | (24 | ) |  | $ | 5 |  |  | $ | 25 |  |  | $ | 7 |
Commodity contracts |  |  | 15 |  |  |  | (8 | ) |  |  | (23 | ) |  |  | 3 |
Interest rate contracts |  |  | 38 |  |  |  | (33 | ) |  |  | 1 |  |  |  | (80 | )
Total |  | $ | 29 |  |  | $ | (36 | ) |  | $ | 3 |  |  | $ | (70 | )
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 Three Months Ended June 30, |  |  | For the Six Months Ended June 30, |
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |
|  | (in millions) |
Derivatives |  | $ | – |  |  | $ | 14 |  |  | $ | 4 |  |  | $ | 14 |
Borrowings |  |  | – |  |  |  | (14 | ) |  |  | (4 | ) |  |  | (14 | )
Economic Hedging |
Schedule of Effects of Derivative Instruments | Pre-tax gains / (losses) recorded in net earnings for economic hedges were:
|  |  |  |  |  |  |  |  |  |  |  |  |  | Location of
|  | For the Three Months Ended |  |  | For the Six Months Ended |  |  | Gain / (Loss)
|  | June 30, |  |  | June 30, |  |  | Recognized
|  | 2015 |  |  | 2014 |  |  | 2015 |  |  | 2014 |  |  | in Earnings
|  | (in millions) |  |  |
Currency exchange contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intercompany loans and forecasted interest payments |  | $ | 7 |  |  | $ | 3 |  |  | $ | 14 |  |  | $ | 1 |  |  | Interest and other expense, net
Forecasted transactions |  |  | (7 | ) |  |  | (30 | ) |  |  | (10 | ) |  |  | (40 | ) |  | Cost of sales
Forecasted transactions |  |  | (152 | ) |  |  | (9 | ) |  |  | 401 |  |  |  | (14 | ) |  | Interest and other expense, net
Forecasted transactions |  |  | (5 | ) |  |  | (2 | ) |  |  | (16 | ) |  |  | (3 | ) |  | Selling, general and administrative expenses
Interest rate contracts |  |  | (1 | ) |  |  | 1 |  |  |  | – |  |  |  | 1 |  |  | Interest and other expense, net
Commodity contracts |  |  | (18 | ) |  |  | (6 | ) |  |  | (59 | ) |  |  | 32 |  |  | Cost of sales
Total |  | $ | (176 | ) |  | $ | (43 | ) |  | $ | 330 |  |  | $ | (23 | ) |  |

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