HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
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9 Months Ended |
Sep. 27, 2024 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Fair value of derivative instruments designated and qualified as part of hedging relationship |
The following table presents the fair values of the Company’s derivative instruments that were designated and qualified as part of a hedging relationship (in millions):
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Fair Value1,2
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| Derivatives Designated as Hedging Instruments |
Balance Sheet Location1
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September 27,
2024 |
December 31,
2023 |
| Assets: |
|
|
|
| Foreign currency contracts |
Prepaid expenses and other current assets |
$ |
113
|
|
$ |
109 |
|
| Foreign currency contracts |
Other noncurrent assets |
10
|
|
13 |
|
|
|
|
|
|
|
|
|
| Interest rate contracts |
Other noncurrent assets |
70
|
|
50 |
|
| Total assets |
|
$ |
193
|
|
$ |
172 |
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| Liabilities: |
|
|
|
| Foreign currency contracts |
Accounts payable and accrued expenses |
$ |
87
|
|
$ |
111 |
|
| Foreign currency contracts |
Other noncurrent liabilities |
48
|
|
40 |
|
| Commodity contracts |
Accounts payable and accrued expenses |
—
|
|
3 |
|
| Interest rate contracts |
Accounts payable and accrued expenses |
—
|
|
5 |
|
| Interest rate contracts |
Other noncurrent liabilities |
854
|
|
1,113 |
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| Total liabilities |
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$ |
989
|
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$ |
1,272 |
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1All of the Company’s derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 16 for the net presentation of the Company’s derivative instruments.
2Refer to Note 16 for additional information related to the estimated fair value.
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| Derivatives Not Designated as Hedging Instruments |
The following table presents the fair values of the Company’s derivative instruments that were not designated as hedging instruments (in millions):
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Fair Value1,2
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| Derivatives Not Designated as Hedging Instruments |
Balance Sheet Location1
|
September 27,
2024 |
December 31, 2023 |
| Assets: |
|
|
|
| Foreign currency contracts |
Prepaid expenses and other current assets |
$ |
46
|
|
$ |
91 |
|
| Foreign currency contracts |
Other noncurrent assets |
2
|
|
3 |
|
| Commodity contracts |
Prepaid expenses and other current assets |
10
|
|
5 |
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|
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| Other derivative instruments |
Prepaid expenses and other current assets |
12
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|
4 |
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|
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| Total assets |
|
$ |
70
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|
$ |
103 |
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| Liabilities: |
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|
| Foreign currency contracts |
Accounts payable and accrued expenses |
$ |
133
|
|
$ |
106 |
|
| Foreign currency contracts |
Other noncurrent liabilities |
14
|
|
3 |
|
| Commodity contracts |
Accounts payable and accrued expenses |
55
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|
62 |
|
| Commodity contracts |
Other noncurrent liabilities |
5
|
|
1 |
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| Other derivative instruments |
Accounts payable and accrued expenses |
—
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|
4 |
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| Total liabilities |
|
$ |
207
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$ |
176 |
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1All of the Company’s derivative instruments are carried at fair value in our consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 16 for the net presentation of the Company’s derivative instruments.
2Refer to Note 16 for additional information related to the estimated fair value.
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| Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) and Other Comprehensive Income (OCI) |
The following tables present the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on other comprehensive income (“OCI”), AOCI and earnings (in millions):
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Gain (Loss)
Recognized
in OCI |
Location of Gain (Loss) Recognized in Income |
Gain (Loss) Reclassified from AOCI into Income |
| Three Months Ended September 27, 2024 |
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|
|
| Foreign currency contracts |
$ |
(150) |
|
Net operating revenues |
$ |
48
|
|
| Foreign currency contracts |
(15) |
|
Cost of goods sold |
4
|
|
| Foreign currency contracts |
—
|
|
Interest expense |
(1) |
|
| Foreign currency contracts |
10
|
|
Other income (loss) — net |
22
|
|
| Commodity contracts |
1
|
|
Cost of goods sold |
—
|
|
| Interest rate contracts |
(55) |
|
Interest expense |
(1) |
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| Total |
$ |
(209) |
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|
$ |
72
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| Three Months Ended September 29, 2023 |
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| Foreign currency contracts |
$ |
90 |
|
Net operating revenues |
$ |
(2) |
|
| Foreign currency contracts |
8 |
|
Cost of goods sold |
— |
|
| Foreign currency contracts |
— |
|
Interest expense |
(1) |
|
| Foreign currency contracts |
(12) |
|
Other income (loss) — net |
(29) |
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|
|
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| Commodity contracts |
(5) |
|
Cost of goods sold |
(4) |
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| Total |
$ |
81 |
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|
$ |
(36) |
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Gain (Loss)
Recognized
in OCI |
Location of Gain (Loss) Recognized in Income |
Gain (Loss) Reclassified from AOCI into Income |
| Nine Months Ended September 27, 2024 |
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| Foreign currency contracts |
$ |
58
|
|
Net operating revenues |
$ |
30
|
|
| Foreign currency contracts |
5
|
|
Cost of goods sold |
13
|
|
| Foreign currency contracts |
—
|
|
Interest expense |
(3) |
|
| Foreign currency contracts |
(14) |
|
Other income (loss) — net |
(4) |
|
| Commodity contracts |
(1) |
|
Cost of goods sold |
(3) |
|
| Interest rate contracts |
(53) |
|
Interest expense |
(1) |
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| Total |
$ |
(5) |
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|
$ |
32
|
|
| Nine Months Ended September 29, 2023 |
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| Foreign currency contracts |
$ |
32 |
|
Net operating revenues |
$ |
(8) |
|
| Foreign currency contracts |
25 |
|
Cost of goods sold |
8 |
|
| Foreign currency contracts |
— |
|
Interest expense |
(3) |
|
| Foreign currency contracts |
(3) |
|
Other income (loss) — net |
(26) |
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| Commodity contracts |
(16) |
|
Cost of goods sold |
(10) |
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Total |
$ |
38 |
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$ |
(39) |
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| Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location |
The following tables summarize the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings (in millions):
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| Hedging Instruments and Hedged Items |
Location of Gain (Loss) Recognized in Income |
Gain (Loss)
Recognized in Income |
| Three Months Ended |
September 27,
2024 |
September 29,
2023 |
| Interest rate contracts |
Interest expense |
$ |
447
|
|
$ |
(103) |
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| Fixed-rate debt |
Interest expense |
(449) |
|
109 |
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| Net impact of fair value hedging instruments |
|
$ |
(2) |
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$ |
6 |
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| Hedging Instruments and Hedged Items |
Location of Gain (Loss) Recognized in Income |
Gain (Loss)
Recognized in Income |
| Nine Months Ended |
September 27,
2024 |
September 29,
2023 |
| Interest rate contracts |
Interest expense |
$ |
283
|
|
$ |
3 |
|
| Fixed-rate debt |
Interest expense |
(282) |
|
18 |
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| Net impact of fair value hedging instruments |
|
$ |
1
|
|
$ |
21 |
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The following table summarizes the amounts recorded in our consolidated balance sheets related to hedged items in fair value hedging relationships (in millions):
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Cumulative Amount of Fair Value Hedging Adjustments1
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|
Carrying Values of
Hedged Items |
|
Included in the Carrying Values of Hedged Items |
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Remaining for Which Hedge Accounting Has Been Discontinued |
| Balance Sheet Location of Hedged Items |
September 27,
2024 |
December 31,
2023 |
|
September 27,
2024 |
December 31,
2023 |
|
September 27,
2024 |
December 31,
2023 |
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| Current maturities of long-term debt |
$ |
—
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|
$ |
552 |
|
|
$ |
—
|
|
$ |
1 |
|
|
$ |
—
|
|
$ |
— |
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| Long-term debt |
12,548
|
|
12,186 |
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|
(853) |
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(1,135) |
|
|
138
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|
162 |
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1Cumulative amount of fair value hedging adjustments does not include changes due to foreign currency exchange rate fluctuations.
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| Notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges |
The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges (in millions):
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Notional Values |
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Gain (Loss) Recognized in OCI |
|
as of |
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Three Months Ended |
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Nine Months Ended |
| |
September 27,
2024 |
December 31,
2023 |
|
September 27,
2024 |
September 29,
2023 |
|
September 27,
2024 |
September 29,
2023 |
| Foreign currency contracts |
$ |
—
|
|
$ |
150 |
|
|
$ |
(8) |
|
$ |
1 |
|
|
$ |
16
|
|
$ |
— |
|
| Foreign currency denominated debt |
14,255
|
|
12,437 |
|
|
(567) |
|
383 |
|
|
(210) |
|
149 |
|
| Total |
$ |
14,255
|
|
$ |
12,587 |
|
|
$ |
(575) |
|
$ |
384 |
|
|
$ |
(194) |
|
$ |
149 |
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| Derivative Instruments, Not Designated as Hedging Instruments, Gain (Loss) in Earnings |
The following tables present the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings (in millions):
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| Derivatives Not Designated as Hedging Instruments |
Location of Gain (Loss) Recognized in Income |
Gain (Loss)
Recognized in Income |
| Three Months Ended |
September 27,
2024 |
September 29,
2023 |
| Foreign currency contracts |
Net operating revenues |
$ |
(83) |
|
$ |
40 |
|
| Foreign currency contracts |
Cost of goods sold |
(33) |
|
(1) |
|
| Foreign currency contracts |
Other income (loss) — net |
(42) |
|
(15) |
|
|
|
|
|
|
|
|
|
| Commodity contracts |
Cost of goods sold |
(24) |
|
40 |
|
|
|
|
|
| Other derivative instruments |
Selling, general and administrative expenses |
15
|
|
(10) |
|
|
|
|
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| Total |
|
$ |
(167) |
|
$ |
54 |
|
|
|
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|
|
|
|
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| Derivatives Not Designated as Hedging Instruments |
Location of Gain (Loss) Recognized in Income |
Gain (Loss)
Recognized in Income |
| Nine Months Ended |
September 27,
2024 |
September 29,
2023 |
| Foreign currency contracts |
Net operating revenues |
$ |
36
|
|
$ |
23 |
|
| Foreign currency contracts |
Cost of goods sold |
(41) |
|
50 |
|
| Foreign currency contracts |
Other income (loss) — net |
(100) |
|
(15) |
|
|
|
|
|
|
|
|
|
| Commodity contracts |
Cost of goods sold |
(92) |
|
(90) |
|
|
|
|
|
| Other derivative instruments |
Selling, general and administrative expenses |
27
|
|
(6) |
|
|
|
|
|
| Total |
|
$ |
(170) |
|
$ |
(38) |
|
|