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Financial Instruments (Tables)
 6 Months Ended
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 )