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Financial Instruments (Tables)
 12 Months Ended
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