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Financial Instruments
 9 Months Ended
Sep. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Financial Instruments
Note 9. Financial Instruments

Fair Value of Derivative Instruments
Derivative instruments were recorded at fair value in the condensed consolidated balance sheets as follows:
 As of September 30, 2024As of December 31, 2023
Asset
Derivatives		Liability
Derivatives		Asset
Derivatives		Liability
Derivatives
 (in millions)
Derivatives designated as
accounting hedges:
Interest rate contracts$81 $81 $120 $57 
Net investment hedge derivative contracts (1)
166 391 163 382 
$247 $472 $283 $439 
Derivatives not designated as
   accounting hedges:
Currency exchange contracts$210 $97 $195 $134 
Commodity contracts2,093 2,073 1,119 984 
Interest rate contracts1 3 — 2 
$2,304 $2,173 $1,314 $1,120 
Total fair value$2,551 $2,645 $1,597 $1,559 

(1)Net investment hedge derivative contracts consist of cross-currency interest rate swaps, forward contracts and options. We also designate some of our non-U.S. dollar denominated debt to hedge a portion of our net investments in our non-U.S. operations. This debt is not reflected in the table above, but is included in long-term debt discussed in Note 8, Debt and Borrowing Arrangements. Both net investment hedge derivative contracts and non-U.S. dollar denominated debt acting as net investment hedges are also disclosed in the Derivative Volume table and the Hedges of Net Investments in International Operations section appearing later in this footnote.



We recorded the fair value of our derivative instruments in the condensed consolidated balance sheet as follows:

 As of September 30, 2024As of December 31, 2023
 (in millions)
Other current assets
$2,225 $1,347 
Other assets
326 250 
Other current liabilities
2,242 1,209 
Other liabilities
403 350 

The fair values (asset/(liability)) of our derivative instruments were determined using:
 As of September 30, 2024
 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$113 $— $113 $— 
Commodity contracts20 (69)89 — 
Interest rate contracts(2)— (2)— 
Net investment hedge contracts(225)— (225)— 
Total derivatives$(94)$(69)$(25)$— 
 As of December 31, 2023
 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$61 $— $61 $— 
Commodity contracts135 28 107 — 
Interest rate contracts61 — 61 — 
Net investment hedge contracts(219)— (219)— 
Total derivatives$38 $28 $10 $— 

Level 1 financial assets and liabilities consist of exchange-traded commodity futures and listed options. The fair value of these instruments is determined based on quoted market prices on commodity exchanges.

Level 2 financial assets and liabilities consist primarily of over-the-counter (“OTC”) currency exchange forwards, options and swaps; commodity forwards and options; net investment hedge contracts; and interest rate swaps. Our currency exchange contracts are valued using an income approach based on observable market forward rates less the contract rate multiplied by the notional amount. Commodity derivatives are valued using an income approach based on the observable market commodity index prices less the contract rate multiplied by the notional amount or based on pricing models that rely on market observable inputs such as commodity prices. Our calculation of the fair value of interest rate swaps is derived from a discounted cash flow analysis based on the terms of the contract and the observable market interest rate curve. Our calculation of the fair value of financial instruments takes into consideration the risk of nonperformance, including counterparty credit risk. Our OTC derivative transactions are governed by International Swap Dealers Association agreements and other standard industry contracts. Under these agreements, we do not post nor require collateral from our counterparties. The majority of our derivative contracts do not have a legal right of set-off. We manage the credit risk in connection with these and all our derivatives by entering into transactions with counterparties with investment grade credit ratings, limiting the amount of exposure with each counterparty and monitoring the financial condition of our counterparties.

Derivative Volume
The notional values of our hedging instruments were:
 Notional Amount
 As of September 30,
2024		As of December 31, 2023
 (in millions)
Currency exchange contracts:
Intercompany loans and forecasted interest payments
$7,712 $2,860 
Forecasted transactions
9,213 5,550 
Commodity contracts
15,467 16,631 
Interest rate contracts5,836 2,384 
Net investment hedges:
Net investment hedge derivative contracts8,878 7,456 
Non-U.S. dollar debt designated as net investment hedges:
Euro notes
3,547 3,516 
Swiss franc notes
237 386 
Canadian dollar notes
924 453 

Cash Flow Hedges
Cash flow hedge activity, net of taxes, is recorded within accumulated other comprehensive earnings/(losses). Refer to Note 13, Reclassifications from Accumulated Other Comprehensive Income for additional information on current period activity. Based on current market conditions, we would expect to transfer losses of $70 million (net of taxes) for interest rate cash flow hedges to earnings during the next 12 months.
Cash Flow Hedge Coverage
As of September 30, 2024, our longest dated cash flow hedges were interest rate swaps that hedge forecasted interest rate payments over the next 4 years, 3 months.

Hedges of Net Investments in International Operations

Net investment hedge ("NIH") derivative contracts
We enter into cross-currency interest rate swaps, forwards and options to hedge certain investments in our non-U.S. operations against movements in exchange rates. The aggregate notional value as of September 30, 2024 was $8.9 billion.

Net investment hedge derivative contract impacts on other comprehensive earnings and net earnings were:
 For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
 2024202320242023
 (in millions)
After-tax (loss)/gain on NIH contracts (1)
$(250)$72 $(65)$89 

(1)Amounts recorded for unsettled and settled NIH derivative contracts are recorded in the cumulative translation adjustment within other comprehensive earnings. The cash flows from the settled contracts are reported within other investing activities in the condensed consolidated statement of cash flows.
 For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
 2024202320242023
 (in millions)
Amounts excluded from the assessment of hedge effectiveness (1)
$45 $38 $132 $110 

(1)We elected to record changes in the fair value of amounts excluded from the assessment of effectiveness in net earnings within interest and other expense, net.

Non-U.S. dollar debt designated as net investment hedges
After-tax gains/(losses) related to hedges of net investments in international operations were recorded within the cumulative translation adjustment section of other comprehensive income and were:

 For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
 2024202320242023
 (in millions)
Euro notes$(102)$82 $(23)$32 
Swiss franc notes(18)11 1 (5)
Canadian notes(9)9 2 1 
Economic Hedges
Pre-tax gains/(losses) recorded in net earnings for economic hedges were:

 For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,		Location of Gain/(Loss) Recognized in Earnings
 2024202320242023
 (in millions) 
Currency exchange contracts:
Intercompany loans and forecasted interest payments$(67)$— $1 $47 Interest and other expense, net
Forecasted transactions
(13)15 10 44 Cost of sales
Forecasted transactions
(1)— (3)13 Interest and other expense, net
Forecasted transactions
1 (3)2 (9)Selling, general and administrative expenses
Commodity contracts14 72 943 176 Cost of sales
Equity method investment contracts (1)
— 4 — 7 Gain on equity method investment transactions
Total$(66)$88 $953 $278 

(1) Equity method investment contracts consisted of the bifurcated embedded derivative option that were a component of the September 20, 2021 €300 million exchangeable bonds issuance and expired on September 20, 2024. Refer to Note 6, Investments.
Fair Value of Contingent Consideration
The following is a summary of our contingent consideration liability activity:

 For the Three Months Ended
September 30,		For the Nine Months Ended
September 30,
 2024202320242023
 (in millions)
Liability at beginning of period$661 $567 $680 $642 
Changes in fair value (1)
(350)35 (315)50 
Payments(93)— (147)(90)
Liability at end of period$218 $602 $218 $602 

Contingent consideration was recorded at fair value in the condensed consolidated balance sheets as follows:

 As of September 30, 2024
 Total Fair Value of
Liability		Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)		Significant
Other Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Clif Bar (1)
$218 $— $— $218 
Total contingent consideration$218 $— $— $218 

 As of December 31, 2023
 Total Fair Value of
Liability		Quoted Prices in
Active Markets
for Identical
Assets
(Level 1)		Significant
Other Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
 (in millions)
Clif Bar (1)
$548 $— $— $548 
Other (2)
132 — — 132 
Total contingent consideration$680 $— $— $680 

(1)In connection with the Clif Bar acquisition, we entered into a contingent consideration arrangement that may require us to pay additional consideration to the sellers for achieving certain net revenue, gross profit and EBITDA targets in 2025 and 2026 that exceed our base financial projections for the business implied in the upfront purchase price. The contingent consideration liabilities are recorded at fair value within long-term liabilities. The estimated fair value of the contingent consideration obligation is determined using a Monte Carlo simulation. Significant assumptions used in assessing the fair value of the liability include financial projections for net revenue, gross profit, and EBITDA, as well as discount and volatility rates. Fair value adjustments are primarily recorded in selling, general and administrative expenses in the condensed consolidated statement of earnings. During the three months ended September 30, 2024, the expected forecast for 2025 and 2026 has been updated to reflect recent trends in business performance and market outlook which resulted in a reduction in the fair value of the contingent consideration.
(2)The other contingent consideration liabilities were recorded at fair value, with $132 million classified as other current liabilities at December 31, 2023. Fair value adjustments were recorded in selling, general and administrative expenses in the condensed consolidated statement of earnings through the second quarter of 2024. Payments on outstanding amounts as of December 31, 2023 were made in the second and third quarter of 2024, and the majority was classified within cash flows provided by operating activities in the consolidated statement of cash flows.