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Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2017

Fair Value of Derivatives Instruments

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

		As of March 31, 2017								As of December 31, 2016
		Asset				Liability				Asset				Liability
		Derivatives				Derivatives				Derivatives				Derivatives
		(in millions)
Derivatives designated as accounting hedges:
Currency exchange contracts		$	13			$	2			$	19			$	8
Commodity contracts			7				13				17				22
Interest rate contracts			103				24				108				19
		$	123			$	39			$	144			$	49
Derivatives not designated as accounting hedges:
Currency exchange contracts		$	32			$	53			$	29			$	43
Commodity contracts			26				145				112				167
Interest rate contracts			20				14				27				19
		$	78			$	212			$	168			$	229
Total fair value		$	201			$	251			$	312			$	278

Notional Values of Derivative Instruments

The net notional values of our derivative instruments were:

		Notional Amount
		As of March 31,				As of December 31,
		2017				2016
		(in millions)
Currency exchange contracts:
Intercompany loans and forecasted interest payments		$	3,181			$	3,343
Forecasted transactions			1,655				1,452
Commodity contracts			1,144				837
Interest rate contracts			6,375				6,365
Net investment hedge – euro notes			3,563				4,012
Net investment hedge – pound sterling notes			426				419
Net investment hedge – Swiss franc notes			1,646				1,447

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								Location of Gain/(Loss) Recognized in AOCI
		March 31,
		2017				2016
		(in millions)
Euro notes		$	(29	)		$	154			Currency
Pound sterling notes			(5	)			(23	)		Translation
Swiss franc notes			(15	)			43			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, 2017
						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		$	(10	)		$	–			$	(10	)		$	–
Commodity contracts			(125	)			(120	)			(5	)			–
Interest rate contracts			85				–				85				–
Total derivatives		$	(50	)		$	(120	)		$	70			$	–
		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			$	–

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 Three Months Ended March 31,
		2017				2016
		(in millions)
Accumulated gain/(loss) at January 1		$	(121	)		$	(45	)
Transfer of realized losses/(gains) in fair value to earnings			7				58
Unrealized gain/(loss) in fair value			11				(66	)
Accumulated gain/(loss) at March 31		$	(103	)		$	(53	)

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,
		2017				2016
		(in millions)
Currency exchange contracts – forecasted transactions		$	–			$	5
Commodity contracts			(7	)			(3	)
Interest rate contracts			–				(60	)
Total		$	(7	)		$	(58	)
After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were:
		For the Three Months Ended March 31,
		2017				2016
		(in millions)
Currency exchange contracts – forecasted transactions		$	(6	)		$	(12	)
Commodity contracts			(1	)			(5	)
Interest rate contracts			18				(49	)
Total		$	11			$	(66	)

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,
									2017						2016
		(in millions)
Derivatives		$	(4	)		$	5
Borrowings			4				(5	)

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
		2017				2016
		(in millions)
Currency exchange contracts:
Intercompany loans and forecasted interest payments		$	2			$	5				Interest and other expense, net
Forecasted transactions			(17	)			(31	)			Cost of sales
Forecasted transactions			(2	)			8				Interest and other expense, net
Forecasted transactions			(1	)			4				Selling, general and administrative expenses
Commodity contracts			(62	)			(44	)			Cost of sales
Total		$	(80	)		$	(58	)

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Tabular disclosure of the fair value of financial instruments, including financial assets and financial liabilities, and the measurements of those instruments, assets, and liabilities.

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