Derivative Instruments and Fair Value Measurements (Tables)

6 Months Ended

Jul. 02, 2011

Derivative Instruments and Fair Value Measurements

Total Notional Amounts of the Company's Derivative Instruments

		July 2,		January 1,
(millions)		2011		2011
Foreign currency exchange contracts	$	1,278	$	1,075
Interest rate contracts		2,700		1,900
Commodity contracts		291		379
Total	$	4,269	$	3,354

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of July 2, 2011 and January 1, 2011:
			Level 1				Level 2				Total
			July 2,		January 1,		July 2,		January 1,		July 2,		January 1,
(millions)			2011		2011		2011		2011		2011		2011
Derivatives designated as hedging instruments:
Assets:
Foreign currency exchange contracts:
	Other prepaid assets	$	-	$	-	$	14	$	7	$	14	$	7
Interest rate contracts:
	Other prepaid assets		-		-		-		5		-		5
	Other assets		-		-		54		69		54		69
Commodity contracts:
	Other prepaid assets		5		23		1		-		6		23
Total assets		$	5	$	23	$	69	$	81	$	74	$	104
Liabilities:
Foreign currency exchange contracts:
	Other current liabilities	$	-	$	-	$	(18)	$	(27)	$	(18)	$	(27)
Interest rate contracts:
	Other liabilities		-		-		(13)		-		(13)		-
Commodity contracts:
	Other current liabilities		(12)		-		(9)		(10)		(21)		(10)
	Other liabilities		-		-		(25)		(29)		(25)		(29)
Total liabilities		$	(12)	$	-	$	(65)	$	(66)	$	(77)	$	(66)
Derivatives not designated as hedging instruments:
Assets:
Interest rate contracts:
	Other assets	$	-	$	-	$	26	$	-	$	26	$	-
Total assets		$	-	$	-	$	26	$	-	$	26	$	-

The Effect of Derivative Instruments on the Consolidated Statement of Income

The effect of derivative instruments on the Consolidated Statement of Income for the quarters ended July 2, 2011 and July 3, 2010 was as follows:
										Location of gain		Gain (loss)
Derivatives in fair value hedging										(loss) recognized		recognized in
relationships (millions)										in income		income
												July 2,		July 3,
												2011		2010
Foreign currency exchange contracts										Other income (expense), net	$	3	$	(22)
Interest rate contracts										Interest expense		12		10
Total											$	15	$	(12)
					Location of gain		Gain (loss)			Location of gain
Derivatives in cash flow hedging		Gain (loss)			(loss) reclassified		reclassified from			(loss) recognized		Gain (loss)
relationships (millions)		recognized in AOCI			from AOCI		AOCI into income			in income (a)		recognized in income(a)
		July 2,		July 3,			July 2,		July 3,			July 2,		July 3,
		2011		2010			2011		2010			2011		2010
Foreign currency exchange contracts	$	(1)	$	-	COGS	$	(1)	$	(6)	Other income (expense), net	$	-	$	-
Foreign currency exchange contracts		(1)		1	SGA expense		-		-	Other income (expense), net		-		-
Interest rate contracts		(12)		-	Interest expense		1		(1)	N/A		-		-
Commodity contracts		(32)		(5)	COGS		3		(11)	Other income (expense), net		-		-
Total	$	(46)	$	(4)		$	3	$	(18)		$	-	$	-
										Location of gain		Gain (loss)
Derivatives not designated as hedging										(loss) recognized		recognized in
instruments (millions)										in income		income
												July 2,		July 3,
												2011		2010
Foreign currency exchange contracts										Other income (expense), net	$	1	$	-
Interest rate contracts										Interest expense	$	-	$	-
Total											$	1	$	-
(a) Includes the ineffective portion and amount excluded from effectiveness testing.

The effect of derivative instruments on the Consolidated Statement of Income for the year-to-date periods ended July 2, 2011 and July 3, 2010 were as follows:
										Location of gain		Gain (loss)
Derivatives in fair value hedging										(loss) recognized		recognized in
relationships (millions)										in income		income
												July 2,		July 3,
												2011		2010
Foreign currency exchange contracts										Other income (expense), net	$	25	$	(51)
Interest rate contracts										Interest expense		27		20
Total											$	52	$	(31)
					Location of gain		Gain (loss)			Location of gain
Derivatives in cash flow hedging		Gain (loss)			(loss) reclassified		reclassified from			(loss) recognized		Gain (loss)
relationships (millions)		recognized in AOCI			from AOCI		AOCI into income			in income (a)		recognized in income(a)
		July 2,		July 3,			July 2,		July 3,			July 2,		July 3,
		2011		2010			2011		2010			2011		2010
Foreign currency exchange contracts	$	(3)	$	(12)	COGS	$	(3)	$	(13)	Other income (expense), net	$	(1)	$	-
Foreign currency exchange contracts		(2)		2	SGA expense		-		-	Other income (expense), net		-		-
Interest rate contracts		(13)		-	Interest expense		2		(2)	N/A		-		-
Commodity contracts		(17)		(29)	COGS		12		(16)	Other income (expense), net		-		(1)
Total	$	(35)	$	(39)		$	11	$	(31)		$	(1)	$	(1)
										Location of gain		Gain (loss)
Derivatives not designated as hedging										(loss) recognized		recognized in
instruments (millions)										in income		income
												July 2,		July 3,
												2011		2010
Foreign currency exchange contracts										Other income (expense), net	$	1	$	0
Interest rate contracts										Interest expense	$	(3)	$	-
Total											$	(2)	$	-
(a) Includes the ineffective portion and amount excluded from effectiveness testing.

Fair Value of Long-term Debt

(millions)		Fair Value		Carrying Value
Long-term debt	$	5,767	$	5,308