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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2013

Financial assets and financial liabilities measured at fair value on a recurring basis

($ in millions)

At December 31, 2013:				Level 1		Level 2		Level 3		Total
Assets
	Cash equivalents(1)
		Time deposits and certificates of deposit	$	—	$	4,754	$	—	$	4,754
		Commercial paper		—		1,507		—		1,507
		Money market funds		1,728		—		—		1,728
		Other securities		—		8		—		8
	Total			1,728		6,269		—		7,997	(6)
	Debt securities — current (2)			—		350		—		350	(6)
	Debt securities — noncurrent (3)			1		7		—		9
	Available-for-sale equity investments (3)			18		—		—		18
	Derivative assets (4)
		Interest rate contracts		—		308		—		308
		Foreign exchange contracts		—		375		—		375
		Equity contracts		—		36		—		36
	Total			—		719		—		719	(7)
Total assets			$	1,747	$	7,345	$	—	$	9,092	(7)
Liabilities
	Derivative liabilities (5)
		Interest rate contracts	$	—	$	13	$	—	$	13
		Foreign exchange contracts		—		484		—		484
		Equity contracts		—		4		—		4
Total liabilities			$	—	$	501	$	—	$	501	(7)

(1) Included within cash and cash equivalents in the Consolidated Statement of Financial Position.

(2) Commercial paper reported as marketable securities in the Consolidated Statement of

Financial Position.

(3) Included within investments and sundry assets in the Consolidated Statement of Financial Position.

(4) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments

and sundry assets in the Consolidated Statement of Financial Position at December 31, 2013 were $318 million

and $401 million, respectively.

(5) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Statement of Financial Position at December 31, 2013 were $375 million and $126 million, respectively.

(6) Available-for-sale securities with carrying values that approximate fair value.

(7) If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated

Statement of Financial Position, the total derivative asset and liability positions would have been reduced by $251

million each.

($ in millions)

At December 31, 2012:				Level 1		Level 2		Level 3		Total
Assets
	Cash equivalents(1)
		Time deposits and certificates of deposit	$	—	$	3,694	$	—	$	3,694
		Commercial paper		—		2,098		—		2,098
		Money market funds		1,923		—		—		1,923
		Other securities		—		30		—		30
	Total			1,923		5,823		—		7,746	(6)
	Debt securities — current (2)			—		717		—		717	(6)
	Debt securities — noncurrent (3)			2		8				10
	Available-for-sale equity investments (3)			34		—		—		34
	Derivative assets (4)
		Interest rate contracts		—		604		—		604
		Foreign exchange contracts		—		305		—		305
		Equity contracts		—		9		—		9
	Total			—		918		—		918	(7)
Total assets			$	1,959	$	7,466	$	—	$	9,424	(7)
Liabilities
	Derivative liabilities (5)
		Foreign exchange contracts	$	—	$	496	$	—	$	496
		Equity contracts		—		7		—		7
Total liabilities			$	—	$	503	$	—	$	503	(7)

(1) Included within cash and cash equivalents in the Consolidated Statement of Financial Position.

(2) Commercial paper and certificates of deposit reported as marketable securities in the Consolidated Statement of

Financial Position.

(3) Included within investments and sundry assets in the Consolidated Statement of Financial Position.

(4) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments

and sundry assets in the Consolidated Statement of Financial Position at December 31, 2012 were $333 million and

$585 million, respectively.

(5) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other

liabilities in the Consolidated Statement of Financial Position at December 31, 2012 were $426 million and $78

million, respectively.

(6) Available-for-sale securities with carrying values that approximate fair value.

(7) If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated

Statement of Financial Position, the total derivative asset and liability positions would have been reduced by $262

million each.

Noncurrent debt and marketable equity securities available-for-sale and recorded at fair value

($ in millions)

				Gross		Gross
		Adjusted		Unrealized		Unrealized		Fair
At December 31, 2013:		Cost		Gains		Losses		Value
Debt securities – noncurrent(1)		$	7	$	1	$	—	$	9
Available-for-sale equity investments(1)		$	20	$	2	$	4	$	18


(1)	Included within investments and sundry assets in the Consolidated Statement of Financial Position.

($ in millions)

				Gross		Gross
		Adjusted		Unrealized		Unrealized		Fair
At December 31, 2012:		Cost		Gains		Losses		Value
Debt securities – noncurrent(1)		$	8	$	2	$	—	$	10
Available-for-sale equity investments(1)		$	31	$	4	$	1	$	34


(1)	Included within investments and sundry assets in the Consolidated Statement of Financial Position.

Sales of debt and available-for-sale equity investments

($ in millions)

For the year ended December 31:		2013		2012		2011
Proceeds	$	41	$	112	$	405
Gross realized gains (before taxes)		13		45		232
Gross realized losses (before taxes)		5		1		0

Unrealized gains/(losses) on available-for-sale debt and equity securities

($ in millions)

For the year ended December 31:		2013		2012
Net unrealized gains/(losses) arising during the period		$	0	$	17
Net unrealized (gains)/losses reclassified to net income*			(5)		(25)


*	Includes writedowns of $2.0 million in 2012.

Fair Value of Derivative Instruments in the Consolidated Statement of Financial Position

Fair Values of Derivative Instruments in the Consolidated Statement of Financial Position

($ in millions)

	Fair Value of Derivative Assets							Fair Value of Derivative Liabilities
			Balance Sheet						Balance Sheet
At December 31:			Classification	2013		2012			Classification	2013		2012
Designated as hedging
instruments:
Interest rate contracts		Prepaid expenses and						Other accrued
			other current assets	$	—	$	47		expenses and liabilities	$	0	$	—
		Investments and sundry
			assets		308		557	Other liabilities			13		—
Foreign exchange		Prepaid expenses and						Other accrued
contracts			other current assets		187		135		expenses and liabilities		331		267
		Investments and sundry
			assets		26		5	Other liabilities			112		78
		Fair value of derivative						Fair value of derivative
			assets	$	522	$	744		liabilities	$	456	$	345
Not designated as
hedging instruments
Foreign exchange		Prepaid expenses and						Other accrued
contracts			other current assets	$	94	$	142		expenses and liabilities	$	40	$	152
		Investments and sundry
			assets		67		23	Other liabilities			1		—
Equity contracts		Prepaid expenses and						Other accrued
			other current assets		36		9		expenses and liabilities		4		7
		Fair value of derivative						Fair value of derivative
			assets	$	197	$	174		liabilities	$	45	$	159

Total debt designated as
hedging instruments
Short-term debt					N/A		N/A			$	190	$	578
Long-term debt					N/A		N/A				6,111		3,035
Total				$	719	$	918			$	6,802	$	4,116

N/A-not applicable

Effect of Derivative Instruments in the Consolidated Statement of Earnings


The Effect of Derivative Instruments in the Consolidated Statement of Earnings

($ in millions)

		Gain/(Loss) Recognized in Earnings
		Consolidated
		Statement of
		Earnings	Recognized on						Attributable to Risk
		Line Item	Derivatives(1)						Being Hedged(2)
For the year ended December 31:				2013		2012		2011		2013		2012		2011
Derivative instruments
in fair value hedges
	Interest rate contracts	Cost of financing	$	(109)	$	65	$	271	$	202	$	59	$	(117)
		Interest expense		(74)		55		205		138		50		(89)
Derivative instruments not
designated as hedging instruments(1)
	Foreign exchange contracts	Other (income)
		and expense		(328)		(311)		352		N/A		N/A		N/A
	Equity contracts	SG&A expense		164		110		42		N/A		N/A		N/A
	Warrants	Other (income)
		and expense		—		—		10		N/A		N/A		N/A

Total			$	(347)	$	(81)	$	880	$	340	$	108	$	(206)


($ in millions)

			Gain/(Loss) Recognized in Earnings and Other Comprehensive Income
										Consolidated
										Statement of							(Ineffectiveness) and
			Effective Portion							Earnings	Effective Portion						Amounts Excluded from
For the year			Recognized in OCI							Line Item	Reclassified from AOCI						Effectiveness Testing(3)
		ended December 31:	2013		2012		2011				2013		2012		2011		2013		2012		2011
Derivative instruments
	in cash flow hedges
		Interest rate contracts	$	—	$	—	$	—	Interest expense		$	—	$	(6)	$	(8)	$	—	$	—	$	—

		Foreign exchange		43		32		(266)	Other (income)
		contracts								and expense		162		237		(247)		(0)		3		(3)
									Cost of sales			(34)		7		(182)		—		—		—
									SG&A expense			39		16		(74)		—		—		—
Instruments in net
	investment hedges(4)
		Foreign exchange
		contracts		173		(26)		45	Interest expense			—		—		0		3		11		(9)

Total			$	216	$	6	$	(221)			$	167	$	253	$	(511)	$	3	$	14	$	(12)

(1) The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts.

(2) The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period.

(3) The amount of gain/(loss) recognized in income represents ineffectiveness on hedge relationships.

(4) Instruments in net investment hedges include derivative and non-derivative instruments.

N/A—Not applicable

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References+ Details

- Definition

Tabular disclosure of the realized and unrealized gains and losses reported in the statement of income which have resulted from the sale and holding of marketable securities, respectively, as well as the sale or disposal of cost method investments. Such amounts would include realized gains and losses on the sale or disposal of trading, available-for-sale, and held-to-maturity securities, unrealized gains and losses on trading securities, unrealized gains and losses on available-for-sale and held-to-maturity securities transferred to the trading securities category, realized gains and losses on the sale or disposal of cost method investments, and losses recognized for other than temporary impairments (OTTI) of such investments.

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