Annual report pursuant to Section 13 and 15(d)

HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

v3.22.4
HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Tables)
 12 Months Ended
Dec. 31, 2022
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Fair values 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):
 
Fair Value1,2
Derivatives Designated as Hedging Instruments
Balance Sheet Location1
December 31,
2022		 December 31,
2021
Assets:      
Foreign currency contracts Prepaid expenses and other current assets $ 126  $ 151 
Foreign currency contracts Other noncurrent assets 13  27 
Interest rate contracts Prepaid expenses and other current assets —  1 
Interest rate contracts Other noncurrent assets —  282 
Total assets   $ 139  $ 461 
Liabilities:      
Foreign currency contracts Accounts payable and accrued expenses $ 54  $ 15 
Foreign currency contracts Other noncurrent liabilities 108  17 
Commodity contracts Accounts payable and accrued expenses 2  — 
Interest rate contracts Other noncurrent liabilities 1,676  14 
Total liabilities   $ 1,840  $ 46 
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.
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):
 
Fair Value1,2
Derivatives Not Designated as Hedging Instruments
Balance Sheet Location1
December 31,
2022		 December 31,
2021
Assets:      
Foreign currency contracts Prepaid expenses and other current assets $ 46  $ 53 
Foreign currency contracts Other noncurrent assets 22  — 
Commodity contracts Prepaid expenses and other current assets 34  131 
Commodity contracts Other noncurrent assets —  3 
Other derivative instruments Prepaid expenses and other current assets —  9 
Total assets   $ 102  $ 196 
Liabilities:      
Foreign currency contracts Accounts payable and accrued expenses $ 87  $ 34 
Foreign currency contracts Other noncurrent liabilities 1  9 
Commodity contracts Accounts payable and accrued expenses 35  6 
Commodity contracts Other noncurrent liabilities —  1 
Other derivative instruments Accounts payable and accrued expenses 3  — 
Total liabilities   $ 126  $ 50 
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.
Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) and Other Comprehensive Income (OCI)
The following table presents 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):
Gain (Loss)
Recognized
in OCI		 Location of Gain (Loss) Recognized in Income Gain (Loss)
Reclassified from
AOCI into Income
2022      
Foreign currency contracts $ 205  Net operating revenues $ 218 
Foreign currency contracts 17  Cost of goods sold 28 
Foreign currency contracts —  Interest expense (4)
Foreign currency contracts (91) Other income (loss) — net (79)
Commodity contracts (4) Cost of goods sold (2)
Total $ 127  $ 161 
2021
Foreign currency contracts $ 36  Net operating revenues $ (77)
Foreign currency contracts (2) Cost of goods sold (10)
Foreign currency contracts —  Interest expense (13)
Foreign currency contracts 19  Other income (loss) — net 74 
Interest rate contracts 110  Interest expense (90)
Commodity contracts (1) Cost of goods sold — 
Total $ 162    $ (116)
2020
Foreign currency contracts $ (93) Net operating revenues $ (73)
Foreign currency contracts 4  Cost of goods sold 9 
Foreign currency contracts —  Interest expense (16)
Foreign currency contracts 37  Other income (loss) — net 60 
Interest rate contracts 15  Interest expense (54)
Commodity contracts 2  Cost of goods sold — 
Total $ (35) $ (74)
Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location
The following table summarizes the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings (in millions):
Hedging Instruments and Hedged Items Location of Gain (Loss) Recognized in Income Gain (Loss)
Recognized in Income
2022
Interest rate contracts Interest expense $ (1,944)
Fixed-rate debt Interest expense 1,927 
Net impact of fair value hedging instruments $ (17)
2021
Interest rate contracts Interest expense $ (67)
Fixed-rate debt Interest expense 66 
 Net impact of fair value hedging instruments $ (1)
2020
Interest rate contracts Interest expense $ 275 
Fixed-rate debt Interest expense (274)
Net impact to interest expense $ 1 
Foreign currency contracts Other income (loss) — net $ (4)
Available-for-sale securities Other income (loss) — net 5 
Net impact to other income (loss) — net $ 1 
Net impact of fair value hedging instruments $ 2 
The following table summarizes the amounts recorded in our consolidated balance sheets related to hedged items in fair value hedging relationships (in millions):
Cumulative Amount of Fair Value Hedging Adjustments1
Carrying Values of
Hedged Items		 Included in the Carrying Values of Hedged Items Remaining for Which Hedge Accounting Has Been Discontinued
Balance Sheet Location of Hedged Items December 31,
2022		 December 31,
2021		 December 31,
2022		 December 31,
2021		 December 31,
2022		 December 31,
2021
Current maturities of long-term debt $ —  $ 200  $ —  $ 1  $ —  $ — 
Long-term debt 11,900  12,353  (1,664) 255  195  228 
1 Cumulative amount of fair value hedging adjustments does not include changes due to foreign currency exchange rate fluctuations.
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):
Notional Values Gain (Loss) Recognized in OCI
as of December 31, Year Ended December 31,
  2022 2021 2022 2021 2020
Foreign currency contracts $ —  $ 40  $ (10) $ (10) $ (5)
Foreign currency denominated debt 12,061  12,812  751  928  (1,089)
Total $ 12,061  $ 12,852  $ 741  $ 918  $ (1,094)
Derivative instruments, not designated as hedging instruments, gain (loss) in earnings
The following table presents the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings (in millions):
Derivatives Not Designated as Hedging Instruments Location of Gain (Loss) Recognized in Income Gain (Loss) Recognized in Income
Year Ended December 31,
2022 2021 2020
Foreign currency contracts Net operating revenues $ (55) $ 6  $ 58 
Foreign currency contracts Cost of goods sold 46  (10) 6 
Foreign currency contracts Other income (loss) — net 57  (84) (13)
Commodity contracts Cost of goods sold (40) 171  54 
Interest rate contracts Interest expense —  (187) 6 
Other derivative instruments Selling, general and administrative expenses (21) 34  21 
Other derivative instruments Other income (loss) — net —  (3) (55)
Total   $ (13) $ (73) $ 77