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Financial Instruments (Tables) | 12 Months Ended
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Dec. 31, 2017
Derivatives |
Fair Value of Derivative Instruments | Derivative instruments were recorded at fair value in the consolidated balance sheets as follows:
|  | As of December 31, |
|  | 2017 |  |  | 2016 |
|  | Asset |  |  | Liability |  |  | Asset |  |  | Liability |
|  | Derivatives |  |  | Derivatives |  |  | Derivatives |  |  | Derivatives |
|  | (in millions) |
Derivatives designated as accounting hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency exchange contracts |  | $ | – |  |  | $ | – |  |  | $ | 19 |  |  | $ | 8 |
Commodity contracts |  |  | – |  |  |  | – |  |  |  | 17 |  |  |  | 22 |
Interest rate contracts |  |  | 15 |  |  |  | 509 |  |  |  | 108 |  |  |  | 19 |
|  | $ | 15 |  |  | $ | 509 |  |  | $ | 144 |  |  | $ | 49 |
Derivatives not designated as accounting hedges: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Currency exchange contracts |  | $ | 65 |  |  | $ | 76 |  |  | $ | 29 |  |  | $ | 43 |
Commodity contracts |  |  | 84 |  |  |  | 229 |  |  |  | 112 |  |  |  | 167 |
Interest rate contracts |  |  | 15 |  |  |  | 11 |  |  |  | 27 |  |  |  | 19 |
|  | $ | 164 |  |  | $ | 316 |  |  | $ | 168 |  |  | $ | 229 |
Total fair value |  | $ | 179 |  |  | $ | 825 |  |  | $ | 312 |  |  | $ | 278 |
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, 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 |  | $ | (11 | ) |  | $ | – |  |  | $ | (11 | ) |  | $ | – |
Commodity contracts |  |  | (145 | ) |  |  | (138 | ) |  |  | (7 | ) |  |  | – |
Interest rate contracts |  |  | (490 | ) |  |  | – |  |  |  | (490 | ) |  |  | – |
Total derivatives |  | $ | (646 | ) |  | $ | (138 | ) |  | $ | (508 | ) |  | $ | – |
|  | 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 |  |  | $ | – |
Notional Values of Derivative Instruments | The net notional values of our derivative instruments were:
|  | Notional Amount |
|  | As of December 31, |
|  | 2017 |  |  | 2016 |
|  | (in millions) |
Currency exchange contracts: |  |  |  |  |  |  |  |
Intercompany loans and forecasted interest payments |  | $ | 7,089 |  |  | $ | 3,343 |
Forecasted transactions |  |  | 2,213 |  |  |  | 1,452 |
Commodity contracts |  |  | 1,204 |  |  |  | 837 |
Interest rate contracts |  |  | 6,532 |  |  |  | 6,365 |
Net investment hedge – euro notes |  |  | 3,679 |  |  |  | 4,012 |
Net investment hedge – pound sterling notes |  |  | 459 |  |  |  | 419 |
Net investment hedge – Swiss franc notes |  |  | 1,694 |  |  |  | 1,447 |
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, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (in millions) |
Accumulated (loss)/gain at beginning of period |  | $ | (121 | ) |  | $ | (45 | ) |  | $ | (2 | )
Transfer of realized (gains)/losses in fair value to earnings |  |  | 27 |  |  |  | 53 |  |  |  | – |
Unrealized gain/(loss) in fair value |  |  | (19 | ) |  |  | (129 | ) |  |  | (43 | )
Accumulated (loss)/gain at end of period |  | $ | (113 | ) |  | $ | (121 | ) |  | $ | (45 | )
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, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (in millions) |
Currency exchange contracts – forecasted transactions |  | $ | (3 | ) |  | $ | (1 | ) |  | $ | 83 |
Commodity contracts |  |  | (24 | ) |  |  | (4 | ) |  |  | (52 | )
Interest rate contracts |  |  | – |  |  |  | (48 | ) |  |  | (31 | )
Total |  | $ | (27 | ) |  | $ | (53 | ) |  | $ | – |
After-tax gains/(losses) recognized in other comprehensive earnings/(losses) were:
|  | For the Years Ended December 31, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (in millions) |
Currency exchange contracts – forecasted transactions |  | $ | (38 | ) |  | $ | 8 |  |  | $ | 40 |
Commodity contracts |  |  | 7 |  |  |  | (34 | ) |  |  | (35 | )
Interest rate contracts |  |  | 12 |  |  |  | (103 | ) |  |  | (48 | )
Total |  | $ | (19 | ) |  | $ | (129 | ) |  | $ | (43 | )
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, |
|  | 2017 |  |  | 2016 |  |  | 2015 |
|  | (in millions) |
Derivatives |  | $ | (4 | ) |  | $ | (6 | ) |  | $ | (1 | )
Borrowings |  |  | 4 |  |  |  | 6 |  |  |  | 1 |
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, |  |  | Recognized |
|  | 2017 |  |  | 2016 |  |  | 2015 |  |  | in Earnings |
|  | (in millions) |  |  |  |
Currency exchange contracts: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Intercompany loans and forecasted interest payments |  | $ | 13 |  |  | $ | 21 |  |  | $ | 29 |  |  |  | Interest and other expense, net |
Forecasted transactions |  |  | (37 | ) |  |  | (76 | ) |  |  | 29 |  |  |  | Cost of sales |
Forecasted transactions |  |  | (2 | ) |  |  | 11 |  |  |  | 435 |  |  |  | Interest and other expense, net |
Forecasted transactions |  |  | 3 |  |  |  | 7 |  |  |  | (12 | ) |  |  | Selling, general and administrative expenses |
Commodity contracts |  |  | (218 | ) |  |  | (101 | ) |  |  | (38 | ) |  |  | Cost of sales |
Total |  | $ | (241 | ) |  | $ | (138 | ) |  | $ | 443 |  |  |  |  |
Net investment hedge |
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)
|  | 2017 |  |  | 2016 |  |  | 2015 |  |  | Recognized in AOCI
|  | (in millions) |  |  |
Euro notes |  | $ | (323 | ) |  | $ | 73 |  |  | $ | 268 |  |  | Currency
Pound sterling notes |  |  | (26 | ) |  |  | 148 |  |  |  | 42 |  |  | Translation
Swiss franc notes |  |  | (49 | ) |  |  | 12 |  |  |  | 9 |  |  | Adjustment

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