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Financial Instruments
 6 Months Ended
Jun. 30, 2023
Investments, All Other Investments [Abstract]  
Financial Instruments FINANCIAL INSTRUMENTS
Fair Value
Accounting guidance on fair value measurements specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company’s market assumptions. These two types of inputs create the following fair value hierarchy:
•Level 1 — Quoted prices for identical instruments in active markets.
•Level 2 — Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
•Level 3 — Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
This hierarchy requires the Company to use observable market data, when available, and to minimize the use of unobservable inputs when determining fair value. The Company also considers counterparty credit risk in its assessment of fair value. The Company determines the fair value of structured liabilities (where performance is linked to structured interest rates, inflation or currency risks) using the Term SOFR swap curve and forward interest and exchange rates at period end. Such instruments are classified as Level 2 based on the observability of significant inputs to the model. The Company does not have any instruments classified as Level 3, other than those included in pension asset trusts as discussed in Note 15 of the Company’s 2022 Form 10-K.
The carrying values and the estimated fair values of financial instruments at June 30, 2023 and December 31, 2022 consisted of the following:
 June 30, 2023December 31, 2022
(DOLLARS IN MILLIONS)Carrying ValueFair ValueCarrying ValueFair Value
LEVEL 1
Cash and cash equivalents(1)
$638 $638 $483 $483 
LEVEL 2
Credit facilities and bank overdrafts(2)
— — 106 106 
Derivatives
Derivative assets(3)
17 17 1 1 
Derivative liabilities(3)
119 119 75 75 
Commercial paper(2)
159 159 187 187 
Long-term debt:
2023 Notes(4)
— — 300 298 
2024 Euro Notes(4)
546 535 532 519 
2025 Notes(4)
1,000 890 1,000 884 
2026 Euro Notes(4)
870 784 845 774 
2027 Notes(4)
1,213 1,010 1,215 1,006 
2028 Notes(4)
398 376 398 380 
2030 Notes(4)
1,509 1,186 1,510 1,188 
2040 Notes(4)
773 523 774 535 
2047 Notes(4)
495 383 495 390 
2048 Notes(4)
787 676 787 685 
2050 Notes(4)
1,570 1,003 1,571 1,021 
2024 Term Loan Facility(5)
625 625 625 625 
2026 Term Loan Facility(5)
625 625 625 625 
_______________________
(1)The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments.
(2)The carrying amount approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments.
(3)The carrying amount approximates fair value as the instruments are marked-to-market and held at fair value on the Consolidated Balance Sheets.
(4)The fair value of the Note is obtained from pricing services engaged by the Company, and the Company receives one price for each security. The fair value provided by the pricing services are estimated using pricing models, where the inputs to those models are based on observable market inputs or recent trades of similar securities. The inputs to the valuation techniques applied by the pricing services are typically benchmark yields, benchmark security prices, credit spreads, reported trades and broker-dealer quotes, all with reasonable levels of transparency.
(5)The carrying amount approximates fair value as the Term Loans were assumed at fair value and the interest rate is reset frequently based on current market rates.
Derivatives
Foreign Currency Forward Contracts
The Company periodically enters into foreign currency forward contracts with the objective of reducing exposure to cash flow volatility associated with its intercompany loans and foreign currency receivables and payables. These contracts generally involve the exchange of one currency for a second currency at a future date, have maturities not exceeding twelve months and are with counterparties which are major international financial institutions.
Commodity Contracts
The Company utilizes options, futures and swaps that are not designated as hedging instruments to reduce exposure to commodity price fluctuations on purchases of inventory such as soybeans, soybean oil and soybean meal.
Hedges Related to Issuances of Debt
As of June 30, 2023, the Company designated approximately $1.416 billion of Euro Notes as a hedge of a portion of its net European investments. Accordingly, the change in the value of the debt that is attributable to foreign exchange movements is recorded in other comprehensive income (“OCI”) as a component of foreign currency translation adjustments in the accompanying Consolidated Statements of Income and Comprehensive Income (Loss).
Cross Currency Swaps
The Company has twelve EUR/USD cross currency swaps with a notional value of $1.400 billion that mature through November 2030. The swaps all qualified as net investment hedges in order to mitigate a portion of the Company’s net European investments from foreign currency risk. As of June 30, 2023, the twelve swaps were in a net liability position with an aggregate fair value of $117 million, which were classified as Other assets and Other liabilities on the Consolidated Balance Sheets. Changes in fair value related to cross currency swaps are recorded in OCI.
The following table shows the notional amount of the Company’s derivative instruments outstanding as of June 30, 2023 and December 31, 2022:
(DOLLARS IN MILLIONS)June 30, 2023December 31, 2022
Foreign currency contracts(1)
$(758)$92 
Commodity contracts(1)
7 (1)
Cross currency swaps1,400 1,400 
_______________________
(1)Foreign currency contracts and commodity contracts are presented net of contracts bought and sold.
The following tables show the Company’s derivative instruments measured at fair value (Level 2 of the fair value hierarchy), as reflected on the Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022:
 June 30, 2023
(DOLLARS IN MILLIONS)Fair Value of
Derivatives
Designated as
Hedging
Instruments		Fair Value of
Derivatives Not
Designated as
Hedging
Instruments		Total Fair Value
Derivative assets(1)
Foreign currency contracts$— $17 $17 
Derivative liabilities(2)
Foreign currency contracts$— $1 $1 
Cross currency swaps117 — 117 
Commodity contracts— 1 1 
Total derivative liabilities$117 $2 $119 

 December 31, 2022
(DOLLARS IN MILLIONS)Fair Value of
Derivatives
Designated as
Hedging
Instruments		Fair Value of
Derivatives Not
Designated as
Hedging
Instruments		Total Fair Value
Derivative assets(1)
Foreign currency contracts$— $1 $1 
Derivative liabilities(2)
Cross currency swaps$75 $— $75 
 _______________________
(1)Derivative assets are recorded to Other assets on the Consolidated Balance Sheets.
(2)Derivative liabilities are recorded to Other liabilities on the Consolidated Balance Sheets.
The following table shows the effect of the Company’s derivative instruments which were not designated as hedging instruments on the Consolidated Statements of Income and Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022:
Amount of Gain (Loss)Location of Gain (Loss) Recognized in Income on Derivative
(DOLLARS IN MILLIONS)Three Months Ended June 30,
20232022
Foreign currency contracts(1)
$3 $— Other (income) expense, net
Commodity contracts2 — Cost of goods sold
Total$5 $— 
Amount of Gain (Loss)Location of Gain (Loss) Recognized in Income on Derivative
(DOLLARS IN MILLIONS)Six Months Ended June 30,
20232022
Foreign currency contracts(1)
$3 $2 Other (income) expense, net
Commodity contracts2 — Cost of goods sold
Total$5 $2 
_______________________
(1)The foreign currency contract net gains (losses) offset any recognized gains (losses) arising from the revaluation of the related intercompany loans during the same respective periods.
The following table shows the effect of the Company’s derivative and non-derivative instruments designated as net investment hedging instruments, net of tax, on the Consolidated Statements of Income and Comprehensive Income (Loss) for the three and six months ended June 30, 2023 and 2022:
 Amount of Gain (Loss)
Recognized in OCI on
Derivative and Non-Derivative (Effective
Portion)		Location of Gain (Loss)
Reclassified from Accumulated Other Comprehensive Income (“AOCI”) into Income (Effective Portion)		Amount of Gain (Loss)
Reclassified from
AOCI into
Income (Effective
Portion)
 Three Months Ended June 30,Three Months Ended June 30,
(DOLLARS IN MILLIONS)2023202220232022
Derivatives in Net Investment Hedging Relationships:
Cross currency swaps$(30)$49 N/A$— $— 
Non-Derivatives in Net Investment Hedging Relationships:
2024 Euro Notes(2)21 N/A— — 
2026 Euro Notes(4)34 N/A— — 
Total$(36)$104 $— $— 
 Amount of Gain (Loss)
Recognized in OCI on
Derivative and Non-Derivative (Effective
Portion)		Location of Gain (Loss)
Reclassified from AOCI into Income (Effective Portion)		Amount of Gain (Loss)
Reclassified from
AOCI into
Income (Effective
Portion)
 Six Months Ended June 30,Six Months Ended June 30,
 2023202220232022
Derivatives in Net Investment Hedging Relationships:
Cross currency swaps$(33)$48 N/A$— $— 
Non-Derivatives in Net Investment Hedging Relationships:
2024 Euro Notes(11)30 N/A— — 
2026 Euro Notes(18)48 N/A— — 
Total$(62)$126 $— $— 
The ineffective portion of the above noted net investment hedges was not material and was recorded as a component of interest expense on the Consolidated Statements of Income and Comprehensive Income (Loss) during the three and six months ended June 30, 2023 and 2022.
At June 30, 2023, based on current market rates, the Company does not expect any derivative losses (net of tax), included in AOCI, to be reclassified into earnings within the next 12 months.