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Financial Instruments (Notes) | 9 Months Ended
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Sep. 30, 2022
Investments, Debt and Equity Securities [Abstract] |
Financial Instruments | FINANCIAL INSTRUMENTS A summary of the Company's financial instruments, risk management policies, derivative instruments and hedging activities can be found in Note 22 to the Consolidated Financial Statements included in the 2021 10-K. The following table summarizes the fair value of financial instruments at September 30, 2022 and December 31, 2021:
Fair Value of Financial Instruments | Sep 30, 2022 | Dec 31, 2021
In millions | Cost | Gain | Loss | Fair Value | Cost | Gain | Loss | Fair Value
Cash equivalents: |  |  |  |  |  |  |  |
Held-to-maturity securities 1 | $ | 327 |  | $ | — |  | $ | — |  | $ | 327 |  | $ | 317 |  | $ | — |  | $ | — |  | $ | 317 |
Money market funds | 735 |  | — |  | — |  | 735 |  | 489 |  | — |  | — |  | 489 |
Total cash equivalents | $ | 1,062 |  | $ | — |  | $ | — |  | $ | 1,062 |  | $ | 806 |  | $ | — |  | $ | — |  | $ | 806 |
Marketable securities 2 | $ | 136 |  | $ | 12 |  | $ | — |  | $ | 148 |  | $ | 237 |  | $ | 8 |  | $ | — |  | $ | 245 |
Other investments: |  |  |  |  |  |  |  |
Debt securities: |  |  |  |  |  |  |  |
Government debt 3 | $ | 744 |  | $ | 1 |  | $ | (155) |  | $ | 590 |  | $ | 746 |  | $ | 17 |  | $ | (28) |  | $ | 735 |
Corporate bonds | 1,268 |  | 5 |  | (188) |  | 1,085 |  | 1,251 |  | 93 |  | (20) |  | 1,324 |
Total debt securities | $ | 2,012 |  | $ | 6 |  | $ | (343) |  | $ | 1,675 |  | $ | 1,997 |  | $ | 110 |  | $ | (48) |  | $ | 2,059 |
Equity securities 4 | 4 |  | 6 |  | — |  | 10 |  | 7 |  | 13 |  | — |  | 20 |
Total other investments | $ | 2,016 |  | $ | 12 |  | $ | (343) |  | $ | 1,685 |  | $ | 2,004 |  | $ | 123 |  | $ | (48) |  | $ | 2,079 |
Total cash equivalents, marketable securities and other investments | $ | 3,214 |  | $ | 24 |  | $ | (343) |  | $ | 2,895 |  | $ | 3,047 |  | $ | 131 |  | $ | (48) |  | $ | 3,130 |
Long-term debt including debt due within one year 5 | $ | (13,285) |  | $ | 1,996 |  | $ | (333) |  | $ | (11,622) |  | $ | (14,511) |  | $ | 27 |  | $ | (2,641) |  | $ | (17,125) |
Derivatives relating to: |  |  |  |  |  |  |  |
Interest rates 6 | $ | — |  | $ | 198 |  | $ | — |  | $ | 198 |  | $ | — |  | $ | 1 |  | $ | (140) |  | $ | (139) |
Foreign currency | — |  | 189 |  | (158) |  | 31 |  | — |  | 46 |  | (18) |  | 28 |
Commodities 6 | — |  | 274 |  | (100) |  | 174 |  | — |  | 142 |  | (92) |  | 50 |
Total derivatives | $ | — |  | $ | 661 |  | $ | (258) |  | $ | 403 |  | $ | — |  | $ | 189 |  | $ | (250) |  | $ | (61) |
1.The Company's held-to-maturity securities primarily included treasury bills and time deposits. 2.The Company’s investments in marketable securities are included in “Other current assets” in the consolidated balance sheets. 3.U.S. Treasury obligations, U.S. agency obligations, U.S. agency mortgage-backed securities and other municipalities’ obligations. 4.Equity securities with a readily determinable fair value. 5.Cost includes fair value hedge adjustment gains of $47 million at September 30, 2022 and December 31, 2021 on $2,279 million of debt at September 30, 2022 and December 31, 2021. 6.Presented net of cash collateral where master netting arrangements allow. Cost approximates fair value for all other financial instruments. Debt Securities The Company's investments in debt securities are primarily classified as available-for-sale. The following table provides investing results from available-for-sale securities for the nine months ended September 30, 2022 and 2021:
Investing Results | Nine Months Ended
In millions | Sep 30, 2022 | Sep 30, 2021
Proceeds from sales of available-for-sale securities | $ | 449 |  | $ | 339 |
Gross realized gains | $ | 40 |  | $ | 41 |
Gross realized losses | $ | (42) |  | $ | (8) |
The following table summarizes contractual maturities of the Company's investments in debt securities:
Contractual Maturities of Debt Securities at Sep 30, 2022 1 | Cost | Fair Value
In millions
Within one year | $ | 71 |  | $ | 66 |
One to five years | 706 |  | 627 |
Six to ten years | 710 |  | 581 |
After ten years | 525 |  | 401 |
Total | $ | 2,012 |  | $ | 1,675 |
1.Includes marketable securities with maturities of less than one year. Equity Securities There were no material adjustments to the carrying value of the not readily determinable investments for impairment or observable price changes for the three months ended September 30, 2022. There was $2 million of net unrealized losses recognized in earnings on equity securities for the three months ended September 30, 2022 ($6 million net unrealized loss for the three months ended September 30, 2021). There was $8 million of net unrealized losses recognized in earnings on equity securities for the nine months ended September 30, 2022 ($7 million net unrealized loss for the nine months ended September 30, 2021).
Investments in Equity Securities | Sep 30, 2022 | Dec 31, 2021
In millions
Readily determinable fair value | $ | 10 |  | $ | 20 |
Not readily determinable fair value | $ | 191 |  | $ | 209 |
Derivative Instruments The notional amounts of the Company's derivative instruments presented on a net basis at September 30, 2022 and December 31, 2021 were as follows:
Notional Amounts - Net | Sep 30, 2022 | Dec 31, 2021
In millions
Derivatives designated as hedging instruments: |  |
Interest rate contracts | $ | 3,000 |  | $ | 3,000 |
Foreign currency contracts | $ | 13,131 |  | $ | 5,300 |
Derivatives not designated as hedging instruments: |  |
Interest rate contracts | $ | 10 |  | $ | 36 |
Foreign currency contracts | $ | 15,743 |  | $ | 8,234 |
The notional amounts of the Company's commodity derivatives presented on a net basis at September 30, 2022 and December 31, 2021 were as follows:
Commodity Notionals - Net | Sep 30, 2022 | Dec 31, 2021 | Notional Volume Unit
Derivatives designated as hedging instruments: |  |  |
Hydrocarbon derivatives | 13.5 |  | 9.7 |  | million barrels of oil equivalent
Derivatives not designated as hedging instruments: |  |  |
Hydrocarbon derivatives | — |  | 0.1 |  | million barrels of oil equivalent
Power derivatives | — |  | 3.3 |  | thousands of megawatt hours
Maturity Dates of Derivatives Designated as Hedging Instruments | Year
Interest rate contracts | 2023
Foreign currency contracts | 2023
Commodity contracts | 2026
The following tables provide the fair value and balance sheet classification of derivative instruments at September 30, 2022 and December 31, 2021:
Fair Value of Derivative Instruments | Sep 30, 2022
In millions | Balance Sheet Classification | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheets
Asset derivatives |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Interest rate contracts | Other current assets | $ | 657 |  | $ | (459) |  | $ | 198 |
Foreign currency contracts | Other current assets | 862 |  | (700) |  | 162 |
Commodity contracts | Other current assets | 478 |  | (225) |  | 253 |
Commodity contracts | Deferred charges and other assets | 7 |  | — |  | 7 |
Total |  | $ | 2,004 |  | $ | (1,384) |  | $ | 620 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts | Other current assets | $ | 110 |  | $ | (83) |  | $ | 27 |
Commodity contracts | Other current assets | 34 |  | (20) |  | 14 |
Total |  | $ | 144 |  | $ | (103) |  | $ | 41 |
Total asset derivatives |  | $ | 2,148 |  | $ | (1,487) |  | $ | 661 |
Liability derivatives |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Interest rate contracts | Accrued and other current liabilities | $ | 459 |  | $ | (459) |  | $ | — |
Foreign currency contracts | Accrued and other current liabilities | 723 |  | (700) |  | 23 |
Commodity contracts | Accrued and other current liabilities | 335 |  | (245) |  | 90 |
Commodity contracts | Other noncurrent obligations | 1 |  | (1) |  | — |
Total |  | $ | 1,518 |  | $ | (1,405) |  | $ | 113 |
Derivatives not designated as hedging instruments: |  |  |  |
Foreign currency contracts | Accrued and other current liabilities | $ | 218 |  | $ | (83) |  | $ | 135 |
Commodity contracts | Accrued and other current liabilities | 31 |  | (21) |  | 10 |
Total |  | $ | 249 |  | $ | (104) |  | $ | 145 |
Total liability derivatives |  | $ | 1,767 |  | $ | (1,509) |  | $ | 258 |
1.Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.
Fair Value of Derivative Instruments | Dec 31, 2021
In millions | Balance Sheet Classification | Gross | Counterparty and Cash Collateral Netting 1 | Net Amounts Included in the Consolidated Balance Sheets
Asset derivatives |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Interest rate contracts | Other current assets | $ | 14 |  | $ | (14) |  | $ | — |
Interest rate contracts | Deferred charges and other assets | 130 |  | (130) |  | — |
Foreign currency contracts | Other current assets | 24 |  | (13) |  | 11 |
Foreign currency contracts | Deferred charges and other assets | 117 |  | (89) |  | 28 |
Commodity contracts | Other current assets | 305 |  | (173) |  | 132 |
Commodity contracts | Deferred charges and other assets | 9 |  | (2) |  | 7 |
Total |  | $ | 599 |  | $ | (421) |  | $ | 178 |
Derivatives not designated as hedging instruments: |  |  |  |
Interest rate contracts | Other current assets | $ | 1 |  | $ | — |  | $ | 1 |
Foreign currency contracts | Other current assets | 23 |  | (16) |  | 7 |
Foreign currency contracts | Deferred charges and other assets | 1 |  | (1) |  | — |
Commodity contracts | Other current assets | 8 |  | (5) |  | 3 |
Total |  | $ | 33 |  | $ | (22) |  | $ | 11 |
Total asset derivatives |  | $ | 632 |  | $ | (443) |  | $ | 189 |
Liability derivatives |  |  |  |
Derivatives designated as hedging instruments: |  |  |  |
Interest rate contracts | Accrued and other current liabilities | $ | 33 |  | $ | (14) |  | $ | 19 |
Interest rate contracts | Other noncurrent obligations | 192 |  | (130) |  | 62 |
Foreign currency contracts | Accrued and other current liabilities | 15 |  | (13) |  | 2 |
Foreign currency contracts | Other noncurrent obligations | 90 |  | (89) |  | 1 |
Commodity contracts | Accrued and other current liabilities | 267 |  | (192) |  | 75 |
Commodity contracts | Other noncurrent obligations | 2 |  | (2) |  | — |
Total |  | $ | 599 |  | $ | (440) |  | $ | 159 |
Derivatives not designated as hedging instruments: |  |  |  |
Interest rate contracts | Accrued and other current liabilities | $ | 59 |  | $ | — |  | $ | 59 |
Foreign currency contracts | Accrued and other current liabilities | 31 |  | (16) |  | 15 |
Foreign currency contracts | Other noncurrent obligations | 1 |  | (1) |  | — |
Commodity contracts | Accrued and other current liabilities | 25 |  | (8) |  | 17 |
Total |  | $ | 116 |  | $ | (25) |  | $ | 91 |
Total liability derivatives |  | $ | 715 |  | $ | (465) |  | $ | 250 |
1.Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty. Assets and liabilities related to forward contracts, interest rate swaps, currency swaps, options and other conditional or exchange contracts executed with the same counterparty under a master netting arrangement are netted. Collateral accounts are netted with corresponding assets or liabilities, when applicable. The Company posted cash collateral of $54 million at September 30, 2022 ($71 million at December 31, 2021). No cash collateral was posted by counterparties with the Company at September 30, 2022 and December 31, 2021. The following tables summarize the gain (loss) of derivative instruments in the consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2022 and 2021:
Effect of Derivative Instruments | Amount of gain (loss) recognized in OCI 1 | Amount of gain (loss) recognized in income 2 | Income Statement Classification
| Three Months Ended | Three Months Ended
In millions | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021
Derivatives designated as hedging instruments: |  |  |  |  |
Cash flow hedges: |  |  |  |  |
Interest rate contracts | $ | 24 |  | $ | 5 |  | $ | (3) |  | $ | (2) |  | Interest expense and amortization of debt discount
Foreign currency contracts | 2 |  | 4 |  | 4 |  | (3) |  | Cost of sales
Commodity contracts | 23 |  | 37 |  | 79 |  | 21 |  | Cost of sales
Net foreign investment hedges: |  |  |  |  |
Foreign currency contracts | 88 |  | 20 |  | — |  | — |  |
Excluded components 3 | 25 |  | 12 |  | 15 |  | 1 |  | Sundry income (expense) - net
Total derivatives designated as hedging instruments | $ | 162 |  | $ | 78 |  | $ | 95 |  | $ | 17 |  |
Derivatives not designated as hedging instruments: |  |  |  |  |
Interest rate contracts | $ | — |  | $ | — |  | $ | — |  | $ | (2) |  | Interest expense and amortization of debt discount
Foreign currency contracts | — |  | — |  | (255) |  | (84) |  | Sundry income (expense) - net
Commodity contracts | — |  | — |  | 10 |  | (12) |  | Cost of sales
Total derivatives not designated as hedging instruments | $ | — |  | $ | — |  | $ | (245) |  | $ | (98) |  |
Total derivatives | $ | 162 |  | $ | 78 |  | $ | (150) |  | $ | (81) |  |
1.OCI is defined as other comprehensive income (loss). 2.Pretax amounts. 3.The excluded components are related to the time value of the derivatives designated as hedges.
Effect of Derivative Instruments | Amount of gain (loss) recognized in OCI 1 | Amount of gain (loss) recognized in income 2 | Income Statement Classification
| Nine Months Ended | Nine Months Ended
In millions | Sep 30, 2022 | Sep 30, 2021 | Sep 30, 2022 | Sep 30, 2021
Derivatives designated as hedging instruments: |  |  |  |  |
Fair value hedges: |  |  |  |  |
Interest rate contracts | $ | — |  | $ | — |  | $ | — |  | $ | (25) |  | Interest expense and amortization of debt discount 3
Excluded components 4 | — |  | 2 |  | — |  | — |  | Interest expense and amortization of debt discount
Cash flow hedges: |  |  |  |  |
Interest rate contracts | 231 |  | (39) |  | (8) |  | (7) |  | Interest expense and amortization of debt discount
Foreign currency contracts | 8 |  | 10 |  | 10 |  | (15) |  | Cost of sales
Commodity contracts | 310 |  | 143 |  | 220 |  | 32 |  | Cost of sales
Net foreign investment hedges: |  |  |  |  |
Foreign currency contracts | 135 |  | 33 |  | — |  | — |  |
Excluded components 4 | 59 |  | 20 |  | 38 |  | 5 |  | Sundry income (expense) - net
Total derivatives designated as hedging instruments | $ | 743 |  | $ | 169 |  | $ | 260 |  | $ | (10) |  |
Derivatives not designated as hedging instruments: |  |  |  |  |
Interest rate contracts | $ | — |  | $ | — |  | $ | (1) |  | $ | (5) |  | Interest expense and amortization of debt discount
Foreign currency contracts | — |  | — |  | (531) |  | (202) |  | Sundry income (expense) - net
Commodity contracts | — |  | — |  | 39 |  | (47) |  | Cost of sales
Total derivatives not designated as hedging instruments | $ | — |  | $ | — |  | $ | (493) |  | $ | (254) |  |
Total derivatives | $ | 743 |  | $ | 169 |  | $ | (233) |  | $ | (264) |  |
1.OCI is defined as other comprehensive income (loss). 2.Pretax amounts. 3.Gain (loss) recognized in income of derivatives is offset by gain (loss) recognized in income of the hedged item. 4.The excluded components are related to the time value of the derivatives designated as hedges. The following table provides the net after-tax gain (loss) expected to be reclassified from AOCL to income within the next 12 months:
Expected Reclassifications from AOCL within the next 12 months | Sep 30, 2022
In millions
Cash flow hedges: |
Interest rate contracts | $ | (8) |
Commodity contracts | $ | 170 |
Foreign currency contracts | $ | 9 |
Net foreign investment hedges: |
Excluded components | $ | 18 |

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- Definition The entire disclosure for financial instruments. This disclosure includes, but is not limited to, fair value measurements of short and long term marketable securities, international currencies forward contracts, and auction rate securities. Financial instruments may include hedging and non-hedging currency exchange instruments, derivatives, securitizations and securities available for sale at fair value. Also included are investment results, realized and unrealized gains and losses as well as impairments and risk management disclosures. + References No definition available. + Details
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