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Derivative Financial Instruments and Hedging Activities (Notes)
 9 Months Ended
Sep. 30, 2023
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into highly effective derivative contracts. We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.

Income Effect of Derivative Financial Instruments

The gains/(losses), by hedge designation, reported in income for the periods ended September 30 were as follows (in millions):
 Third QuarterFirst Nine Months
Cash flow hedges
2022202320222023
Reclassified from AOCI to Cost of sales
Foreign currency exchange contracts (a)
$(44)$21 $(224)$111 
Commodity contracts (b)
9 (18)151 (42)
Fair value hedges
Interest rate contracts
Net interest settlements and accruals on hedging instruments
(39)(137)62 (407)
Fair value changes on hedging instruments(600)(219)(1,922)(285)
Fair value changes on hedged debt615 210 1,991 223 
Cross-currency interest rate swap contracts
Net interest settlements and accruals on hedging instruments
(8)(23)(17)(56)
Fair value changes on hedging instruments(66)(46)(164)(48)
Fair value changes on hedged debt67 44 173 47 
Derivatives not designated as hedging instruments
Foreign currency exchange contracts (c)44 22 125 44 
Cross-currency interest rate swap contracts
(494)(137)(1,164)(112)
Interest rate contracts130 28 342 125 
Commodity contracts(41)(4)(72)(60)
Total$(427)$(259)$(719)$(460)
__________
(a)For the third quarter and first nine months of 2022, a $535 million gain and a $641 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax. For the third quarter and first nine months of 2023, a $372 million gain and a $19 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax.
(b)For the third quarter and first nine months of 2022, a $90 million loss and a $166 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax. For the third quarter and first nine months of 2023, a $58 million gain and a $42 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax.
(c)For the third quarter and first nine months of 2022, a $68 million loss and a $12 million loss, respectively, were reported in Cost of sales, and a $112 million gain and a $137 million gain, respectively, were reported in Other income/(loss), net. For the third quarter and first nine months of 2023, a $37 million loss and a $14 million gain, respectively, were reported in Cost of sales, and a $59 million gain and a $30 million gain, respectively, were reported in Other income/(loss), net.
NOTE 15. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Balance Sheet Effect of Derivative Financial Instruments

Derivative assets and liabilities are reported on our consolidated balance sheets at fair value and are presented on a gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts exchanged by the parties and are not a direct measure of our financial exposure. We also enter into master agreements with counterparties that may allow for netting of exposures in the event of default or breach of the counterparty agreement. Collateral represents cash received or paid under reciprocal arrangements that we have entered into with our derivative counterparties, which we do not use to offset our derivative assets and liabilities.

The fair value of our derivative instruments and the associated notional amounts were as follows (in millions):
December 31, 2022September 30, 2023
NotionalFair Value of
Assets		Fair Value of
Liabilities		NotionalFair Value of
Assets		Fair Value of
Liabilities
Cash flow hedges   
Foreign currency exchange contracts
$11,536 $376 $52 $17,139 $218 $42 
Commodity contracts990 16 56 1,007 12 48 
Fair value hedges
Interest rate contracts16,883 — 1,653 16,821 — 1,439 
Cross-currency interest rate swap contracts
885 — 161 2,078 — 202 
Derivatives not designated as hedging instruments
Foreign currency exchange contracts20,851 162 285 20,654 181 115 
Cross-currency interest rate swap contracts
6,635 15 653 6,396 55 515 
Interest rate contracts63,210 931 483 59,155 830 720 
Commodity contracts841 26 35 1,015 13 49 
Total derivative financial instruments, gross (a) (b)
$121,831 $1,526 $3,378 $124,265 $1,309 $3,130 
Current portion
$1,101 $1,656 $981 $1,650 
Non-current portion
425 1,722 328 1,480 
Total derivative financial instruments, gross
$1,526 $3,378 $1,309 $3,130 
__________
(a)At December 31, 2022 and September 30, 2023, we held collateral of $210 million and $128 million, respectively, and we posted collateral of $201 million and $203 million, respectively.
(b)At December 31, 2022 and September 30, 2023, the fair value of assets and liabilities available for counterparty netting was $451 million and $512 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.