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Financial Instruments (Tables)
 3 Months Ended
Mar. 31, 2016
Fair Value of Derivatives Instruments

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

 

                                                                           
     As of March 31, 2016      As of December 31, 2015  
     Asset      Liability      Asset      Liability  
     Derivatives      Derivatives      Derivatives      Derivatives  
     (in millions)  

Derivatives designated as
accounting hedges:

            

Currency exchange contracts

    $ 4       $ 7       $ 20       $ 7   

Commodity contracts

      11         10         37         35   

Interest rate contracts

      17         4         12         57   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 32       $ 21       $ 69       $ 99   
  

 

 

     

 

 

     

 

 

     

 

 

  

Derivatives not designated as
accounting hedges:

            

Currency exchange contracts

    $ 34       $ 88       $ 61       $ 33   

Commodity contracts

      33         48         70         56   

Interest rate contracts

      37         25         43         28   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 104       $ 161       $ 174       $ 117   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total fair value

    $ 136       $ 182       $ 243       $ 216   
  

 

 

     

 

 

     

 

 

     

 

 

  
Notional Values of Derivative Instruments

The net notional values of our derivative instruments were:

 

                                     
     Notional Amount  
     As of March 31,        As of December 31,  
     2016        2015  
     (in millions)  

Currency exchange contracts:

        

Intercompany loans and forecasted interest payments

    $ 4,162         $ 4,148   

Forecasted transactions

      1,464           1,094   

Commodity contracts

      544           732   

Interest rate contracts

      2,115           3,033   

Net investment hedge – euro notes

      5,349           4,345   

Net investment hedge – pound sterling notes

      1,368           1,404   

Net investment hedge – Swiss franc notes

      1,534           1,073   
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 March 31,

     Location of
Gain / (Loss)
Recognized in
AOCI		        
    2016     2015      
    (in millions)          

Euro notes

   $ 154      $ 314        Currency     

Pound sterling notes

     (23 )      32        Translation     

Swiss franc notes

     43        (13 )      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 March 31, 2016  
     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

    $ (57 )     $ –       $ (57 )     $ –   

Commodity contracts

      (14 )       (10 )       (4 )       –   

Interest rate contracts

      25         –         25         –   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total derivatives

    $ (46 )     $ (10 )     $ (36 )     $ –   
  

 

 

     

 

 

     

 

 

     

 

 

  

 

                                                                           
     As of December 31, 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

    $ 41       $ –       $ 41       $ –   

Commodity contracts

      16         29         (13 )       –   

Interest rate contracts

      (30 )       –         (30 )       –   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total derivatives

    $ 27       $ 29       $ (2 )     $ –   
  

 

 

     

 

 

     

 

 

     

 

 

  
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
March 31,		  
     2016      2015  
     (in millions)  

Accumulated gain / (loss) at January 1

    $ (45 )     $ (2 ) 

Transfer of realized losses / (gains) in fair value to earnings

      58         (18 ) 

Unrealized gain / (loss) in fair value

      (66 )       (26 ) 
  

 

 

     

 

 

  

Accumulated gain / (loss) at March 31

    $ (53 )     $ (46 ) 
  

 

 

     

 

 

  
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
March 31,		  
     2016      2015  
     (in millions)  

Currency exchange contracts – forecasted transactions

    $ 5       $ 46   

Commodity contracts

      (3 )       (2 ) 

Interest rate contracts

      (60 )       (26 ) 
  

 

 

     

 

 

  

Total

    $ (58 )     $ 18   
  

 

 

     

 

 

  

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

 

                                     
     For the Three Months Ended
March 31,		  
     2016      2015  
     (in millions)  

Currency exchange contracts – forecasted transactions

    $ (12 )     $ 49   

Commodity contracts

      (5 )       (38 ) 

Interest rate contracts

      (49 )       (37 ) 
  

 

 

     

 

 

  

Total

    $ (66 )     $ (26 ) 
  

 

 

     

 

 

  
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
March 31,		       
       
     2016      2015     
     (in millions)     

Derivatives

    $ 5       $ 4      

Borrowings

      (5 )       (4 )    
Economic Hedging  
Schedule of Effects of Derivative Instruments

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

 
     For the Three Months Ended
March 31,		     

Location of

Gain / (Loss)

Recognized

in Earnings
     2016      2015     
     (in millions)       

Currency exchange contracts:

         

Intercompany loans and forecasted
interest payments

    $ 5       $ 7       Interest and other

expense, net

Forecasted transactions

      (31 )       (3 )     Cost of sales

Forecasted transactions

      8         553       Interest and other
expense, net

Forecasted transactions

      4         (11 )     Selling, general and

administrative
expenses

Interest rate contracts

      –         1       Interest and other
expense, net

Commodity contracts

      (44 )       (41 )     Cost of sales
  

 

 

     

 

 

     

Total

    $ (58 )     $ 506