Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair Value of Derivatives on a Gross Basis Segregated between those Derivatives that are Designated as Hedging Instruments and those that are Not Designated as Hedging Instruments

Presented in the table below is the fair value of derivatives on a gross basis segregated between those derivatives that are designated as hedging instruments and those that are not designated as hedging instruments:

		September 30, 2014						December 31, 2013
		Fair Value of Derivative				U.S. Dollar Notional		Fair Value of Derivative				U.S. Dollar Notional
($ in millions)	Balance Sheet Caption	Asset		Liability				Asset		Liability
Derivatives Designated as Hedging Instruments
Interest rate swap contracts (non-current)	Other assets	$	8	$	—	$	550	$	13	$	—	$	1,550
Interest rate swap contracts (non-current)	Other noncurrent liabilities	—		22		2,000		—		25		2,000
Foreign exchange contracts (current)	Deferred income taxes and other current assets	627		—		7,157		493		—		4,427
Foreign exchange contracts (non-current)	Other assets	491		—		6,238		515		—		6,676
Foreign exchange contracts (current)	Accrued and other current liabilities	—		1		464		—		19		1,659
Foreign exchange contracts (non-current)	Other noncurrent liabilities	—		1		120		—		—		—
		$	1,126	$	24	$	16,529	$	1,021	$	44	$	16,312
Derivatives Not Designated as Hedging Instruments
Foreign exchange contracts (current)	Deferred income taxes and other current assets	$	234	$	—	$	9,192	$	69	$	—	$	5,705
Foreign exchange contracts (current)	Accrued and other current liabilities	—		70		4,687		—		140		7,892
		$	234	$	70	$	13,879	$	69	$	140	$	13,597
		$	1,360	$	94	$	30,408	$	1,090	$	184	$	29,909

Information on Derivative Positions Subject to Master Netting Arrangements as if they were Presented on a Net Basis

The following table provides information on the Company’s derivative positions subject to these master netting arrangements as if they were presented on a net basis, allowing for the right of offset by counterparty and cash collateral exchanged per the master agreements and related credit support annexes:

	September 30, 2014						December 31, 2013
($ in millions)	Asset			Liability			Asset			Liability
Gross amounts recognized in the consolidated balance sheet	$	1,360		$	94		$	1,090		$	184
Gross amount subject to offset in master netting arrangements not offset in the consolidated balance sheet	(91		)	(91		)	(147		)	(147		)
Cash collateral (received) posted	(942		)	—			(652		)	—
Net amounts	$	327		$	3		$	291		$	37

Location and Pretax Gain or Loss Amounts for Derivatives that are: (i) Designated in a Fair Value Hedging Relationship, (ii) Designated in a Cash Flow Hedging Relationship, (iii) Designated in a Foreign Currency net Investment Hedging Relationship and (iv) Not Designated in a Hedging Relationship

The table below provides information on the location and pretax gain or loss amounts for derivatives that are: (i) designated in a fair value hedging relationship, (ii) designated in a foreign currency cash flow hedging relationship, (iii) designated in a foreign currency net investment hedging relationship and (iv) not designated in a hedging relationship:

	Three Months Ended   September 30,						Nine Months Ended   September 30,
($ in millions)	2014			2013			2014			2013
Derivatives designated in a fair value hedging relationship
Interest rate swap contracts
Amount of loss (gain) recognized in Other (income) expense, net on derivatives (1)	$	23		$	(33	)	$	2		$	1
Amount of (gain) loss recognized in Other (income) expense, net on hedged item	(23		)	30			(3		)	(2		)
Derivatives designated in foreign currency cash flow hedging relationships
Foreign exchange contracts
Amount of (gain) loss reclassified from AOCI to Sales	(42		)	1			(45		)	36
Amount of (gain) loss recognized in OCI on derivatives	(433		)	165			(276		)	(219		)
Derivatives designated in foreign currency net investment hedging relationships
Foreign exchange contracts
Amount of gain recognized in Other (income) expense, net on derivatives (2)	(1		)	(5		)	(3		)	(7		)
Amount of gain recognized in OCI on derivatives	(116		)	(15		)	(67		)	(259		)
Derivatives not designated in a hedging relationship
Foreign exchange contracts
Amount of (gain) loss recognized in Other (income) expense, net on derivatives (3)	(290		)	154			(314		)	146
Amount of loss recognized in Sales	5			8			5			5

⁽¹⁾ There was $3 million of ineffectiveness on the hedge during the third quarter and first nine months of 2013.

⁽²⁾ There was no ineffectiveness on the hedge. Represents the amount excluded from hedge effectiveness testing.

⁽³⁾ These derivative contracts mitigate changes in the value of remeasured foreign currency denominated monetary assets and liabilities attributable to changes in foreign currency exchange rates.

Information on Available-for-sale Investments

Information on available-for-sale investments is as follows:

	September 30, 2014									December 31, 2013
	Fair Value		Amortized Cost		Gross Unrealized					Fair Value		Amortized Cost		Gross Unrealized
($ in millions)					Gains		Losses							Gains		Losses
Corporate notes and bonds	$	9,428	$	9,411	$	31	$	(14	)	$	7,054	$	7,037	$	32	$	(15	)
Commercial paper	2,121		2,121		—		—			1,206		1,206		—		—
U.S. government and agency securities	2,039		2,042		—		(3		)	1,236		1,239		1		(4		)
Asset-backed securities	1,440		1,441		1		(2		)	1,300		1,303		1		(4		)
Mortgage-backed securities	538		540		1		(3		)	476		479		2		(5		)
Foreign government bonds	456		456		—		—			125		126		—		(1		)
Equity securities	707		589		118		—			471		397		74		—
	$	16,729	$	16,600	$	151	$	(22	)	$	11,868	$	11,787	$	110	$	(29	)

Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

	Fair Value Measurements Using								Fair Value Measurements Using
	Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total		Quoted Prices In Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
($ in millions)	September 30, 2014								December 31, 2013
Assets
Investments
Corporate notes and bonds	$	—	$	9,428	$	—	$	9,428	$	—	$	7,054	$	—	$	7,054
Commercial paper	—		2,121		—		2,121		—		1,206		—		1,206
U.S. government and agency securities	—		2,039		—		2,039		—		1,236		—		1,236
Asset-backed securities (1)	—		1,440		—		1,440		—		1,300		—		1,300
Mortgage-backed securities (1)	—		538		—		538		—		476		—		476
Foreign government bonds	—		456		—		456		—		125		—		125
Equity securities	447		—		—		447		238		—		—		238
	447		16,022		—		16,469		238		11,397		—		11,635
Other assets
Securities held for employee compensation	198		62		—		260		186		47		—		233
Derivative assets (2)
Purchased currency options	—		918		—		918		—		868		—		868
Forward exchange contracts	—		434		—		434		—		209		—		209
Interest rate swaps	—		8		—		8		—		13		—		13
	—		1,360		—		1,360		—		1,090		—		1,090
Total assets	$	645	$	17,444	$	—	$	18,089	$	424	$	12,534	$	—	$	12,958
Liabilities
Derivative liabilities (2)
Forward exchange contracts	$	—	$	29	$	—	$	29	$	—	$	134	$	—	$	134
Written currency options	—		43		—		43		—		25		—		25
Interest rate swaps	—		22		—		22		—		25		—		25
Total liabilities	$	—	$	94	$	—	$	94	$	—	$	184	$	—	$	184

⁽¹⁾  Primarily all of the asset-backed securities are highly-rated (Standard & Poor’s rating of AAA and Moody’s Investors Service rating of Aaa), secured primarily by credit card, auto loan, and home equity receivables, with weighted-average lives of primarily 5 years or less. Mortgage-backed securities represent AAA-rated securities issued or unconditionally guaranteed as to payment of principal and interest by U.S. government agencies.

⁽²⁾  The fair value determination of derivatives includes the impact of the credit risk of counterparties to the derivatives and the Company’s own credit risk, the effects of which were not significant.