XML 54 R35.htm IDEA: XBRL DOCUMENT v3.6.0.2
Financial Instruments (Tables)
 12 Months Ended
Dec. 31, 2016
Fair Value of Derivatives Instruments

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

 

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

Derivatives designated as accounting hedges:

            

Currency exchange contracts

    $ 19       $ 8       $ 20       $ 7   

Commodity contracts

      17         22         37         35   

Interest rate contracts

      108         19         12         57   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 144       $ 49       $ 69       $ 99   
  

 

 

     

 

 

     

 

 

     

 

 

  

Derivatives not designated as accounting hedges:

            

Currency exchange contracts

    $ 29       $ 43       $ 61       $ 33   

Commodity contracts

      112         167         70         56   

Interest rate contracts

      27         19         43         28   
  

 

 

     

 

 

     

 

 

     

 

 

  
   $ 168       $ 229       $ 174       $ 117   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total fair value

    $ 312       $ 278       $ 243       $ 216   
  

 

 

     

 

 

     

 

 

     

 

 

  
Notional Values of Derivative Instruments

The net notional values of our derivative instruments were:

 

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

Currency exchange contracts:

      

Intercompany loans and forecasted interest payments

    $ 3,343       $ 4,148   

Forecasted transactions

      1,452         1,094   

Commodity contracts

      837         732   

Interest rate contracts

      6,365         3,033   

Net investment hedge – euro notes

      4,012         4,345   

Net investment hedge – pound sterling notes

      419         1,404   

Net investment hedge – Swiss franc notes

      1,447         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:

 

                                                                           
                          Location of
     For the Years Ended December 31,      Gain / (Loss)
     2016      2015      2014      Recognized in AOCI
            (in millions)              

Euro notes

    $ 73       $ 268       $ 328       Currency

Pound sterling notes

      148         42         39       Translation

Swiss franc notes

      12         9         –       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, 2016  
            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

    $ (3 )     $ –       $ (3 )     $ –   

Commodity contracts

      (60 )       (86 )       26         –   

Interest rate contracts

      97         –         97         –   
  

 

 

     

 

 

     

 

 

     

 

 

  

Total derivatives

    $ 34       $ (86 )     $ 120       $ –   
  

 

 

     

 

 

     

 

 

     

 

 

  
     As of December 31, 2015  
            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

    $ 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 Earnings / (Losses), Net of Taxes

Cash flow hedge activity, net of taxes, within accumulated other comprehensive earnings / (losses) included:

 

                                                        
     For the Years Ended December 31,  
     2016      2015      2014  
     (in millions)  

Accumulated gain / (loss) at January 1

    $ (45 )     $ (2 )     $ 117   

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

      53         –         (40 ) 

Unrealized gain / (loss) in fair value

      (129 )       (43 )       (79 ) 
  

 

 

     

 

 

     

 

 

  

Accumulated gain / (loss) at December 31

    $ (121 )     $ (45 )     $ (2 ) 
  

 

 

     

 

 

     

 

 

  
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,  
     2016      2015      2014  
     (in millions)  

Currency exchange contracts – forecasted transactions

    $ (1 )     $ 83       $ 26   

Commodity contracts

      (4 )       (52 )       16   

Interest rate contracts

      (48 )       (31 )       (2 ) 
  

 

 

     

 

 

     

 

 

  

Total

    $ (53 )     $ –       $ 40   
  

 

 

     

 

 

     

 

 

  

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

 

                                                        
     For the Years Ended December 31,  
     2016      2015      2014  
     (in millions)  

Currency exchange contracts – forecasted transactions

    $ 8       $ 40       $ 82   

Commodity contracts

      (34 )       (35 )       (2 ) 

Interest rate contracts

      (103 )       (48 )       (159 ) 
  

 

 

     

 

 

     

 

 

  

Total

    $ (129 )     $ (43 )     $ (79 ) 
  

 

 

     

 

 

     

 

 

  

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

 

                                                        
     For the Years Ended December 31,  
     2016      2015      2014  
     (in millions)  

Commodity contracts

    $ 2       $ (4 )     $ (10 ) 
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,  
     2016      2015      2014  
            (in millions)         

Derivatives

    $ (6 )     $ (1 )     $ 13  

Borrowings

      6        1        (13 ) 
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

  
     2016      2015      2014      in Earnings  
     (in millions)         

Currency exchange contracts:

            

Intercompany loans and
forecasted interest payments

    $ 21      $ 29      $ 4       
 Interest and other
expense, net		  
 

Forecasted transactions

      (76 )       29        29        Cost of sales  

Forecasted transactions

      11        435        610       
 Interest and other
expense, net		  
 

Forecasted transactions

      7        (12 )       (4 )      

 Selling, general
and administrative
expenses		  
 
 

Commodity contracts

      (101 )       (38 )       (136 )       Cost of sales  
  

 

 

     

 

 

     

 

 

     

Total

    $ (138 )     $ 443      $ 503