XML 32 R21.htm IDEA: XBRL DOCUMENT v3.21.1
Derivative Instruments and Fair Value Measurements (Tables)
3 Months Ended
Apr. 03, 2021
Derivative Instruments and Fair Value Measurements [Abstract]  
Schedule of Total Notional Amounts of Derivative Instruments
Total notional amounts of the Company’s derivative instruments as of April 3, 2021 and January 2, 2021 were as follows:
(millions)April 3,
2021
January 2,
2021
Foreign currency exchange contracts$3,278 $2,856 
Cross-currency contracts1,383 1,411 
Interest rate contracts3,035 2,632 
Commodity contracts640 314 
Total$8,336 $7,213 
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of April 3, 2021 and January 2, 2021:
Derivatives designated as hedging instruments
 April 3, 2021January 2, 2021
(millions)Level 1Level 2TotalLevel 1Level 2Total
Assets:
Cross-currency contracts:
Other current assets$ $31 $31 $— $14 $14 
Other assets 11 11 — 16 16 
Interest rate contracts:
Other current assets 3 3 — — — 
Other assets (a) 130 130 — 60 60 
Total assets$ $175 $175 $— $90 $90 
Liabilities:
Cross-currency contracts:
Other current liabilities$ $(2)$(2)$— $(13)$(13)
   Other Liabilities (16)(16)— (21)(21)
Interest rate contracts:
Other current liabilities (1)(1)— (3)(3)
Other liabilities (a) (4)(4)— — — 
Total liabilities$ $(23)$(23)$— $(37)$(37)
(a) The fair value of the related hedged portion of the Company's long-term debt, a level 2 liability, was $1.2 billion as of April 3, 2021 and $0.8 billion as of January 2, 2021.
Derivatives not designated as hedging instruments
 April 3, 2021January 2, 2021
(millions)Level 1Level 2TotalLevel 1Level 2Total
Assets:
Foreign currency exchange contracts:
Other current assets$ $41 $41 $— $48 $48 
  Other assets 3 3 — — — 
Interest rate contracts:
Other current assets 4 4 — 
Other assets 3 3 — 13 13 
Commodity contracts:
Other current assets7  7 — 
Total assets$7 $51 $58 $$65 $74 
Liabilities:
Foreign currency exchange contracts:
Other current liabilities$ $(71)$(71)$— $(73)$(73)
Other liabilities (6)(6)— (4)(4)
Interest rate contracts:
Other current liabilities (6)(6)— (6)(6)
Other liabilities (11)(11)— (22)(22)
Commodity contracts:
Other current liabilities(8) (8)(1)— (1)
Total liabilities$(8)$(94)$(102)$(1)$(105)$(106)
Schedule of Derivative Instruments in Statement of Financial Position Fair Value
The following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for existing fair value hedges as of April 3, 2021 and January 2, 2021.
(millions)Line Item in the Consolidated Balance Sheet in which the hedged item is includedCarrying amount of the hedged liabilitiesCumulative amount of fair value hedging adjustment included in the carrying amount of the hedged liabilities (a)
April 3,
2021
January 2,
2021
April 3,
2021
January 2,
2021
Interest rate contractsLong-term debt$2,956 $2,568 $20 $25 
(a) The hedged long-term debt includes $15 million and $16 million of hedging adjustment on discontinued hedging relationships as of April 3, 2021 and January 2, 2021, respectively.
Schedule of Offsetting Assets
    
As of April 3, 2021:
  
Gross Amounts Not Offset in the
Consolidated Balance Sheet
  
  
Amounts
Presented in the
Consolidated
Balance Sheet
Financial
Instruments
Cash Collateral
Received/
Posted
Net
Amount
Total asset derivatives$233 $(94)$3 $142 
Total liability derivatives$(125)$94 $31 $ 
 
As of January 2, 2021:
  
Gross Amounts Not Offset in the
Consolidated Balance Sheet
  
  
Amounts
Presented in the
Consolidated
Balance Sheet
Financial
Instruments
Cash Collateral
Received/
Posted
Net
Amount
Total asset derivatives$164 $(116)$— $48 
Total liability derivatives$(143)$116 $$(22)
Schedule of Offsetting Liabilities
    
As of April 3, 2021:
  
Gross Amounts Not Offset in the
Consolidated Balance Sheet
  
  
Amounts
Presented in the
Consolidated
Balance Sheet
Financial
Instruments
Cash Collateral
Received/
Posted
Net
Amount
Total asset derivatives$233 $(94)$3 $142 
Total liability derivatives$(125)$94 $31 $ 
 
As of January 2, 2021:
  
Gross Amounts Not Offset in the
Consolidated Balance Sheet
  
  
Amounts
Presented in the
Consolidated
Balance Sheet
Financial
Instruments
Cash Collateral
Received/
Posted
Net
Amount
Total asset derivatives$164 $(116)$— $48 
Total liability derivatives$(143)$116 $$(22)
Schedule of the Effect of Derivative Instruments on the Consolidated Statements of Income and Comprehensive Income
The effect of derivative instruments on the Consolidated Statements of Income and Comprehensive Income for the quarters ended April 3, 2021 and March 28, 2020 was as follows:
Derivatives and non-derivatives in net investment hedging relationships
(millions)Gain (loss)
recognized in
AOCI
Gain (loss) excluded from assessment of hedge effectivenessLocation of gain (loss) in income of excluded component
 April 3,
2021
March 28,
2020
April 3,
2021
March 28,
2020
Foreign currency denominated long-term debt$103 $$ $— 
Cross-currency contracts27 66 5 Interest expense
Total$130 $75 $5 $
Derivatives not designated as hedging instruments
(millions)Location of gain
(loss) recognized
in income
Gain (loss)
recognized in
income
  April 3,
2021
March 28,
2020
Foreign currency exchange contractsCOGS$(17)$51 
Foreign currency exchange contractsOther income (expense), net(1)
Foreign currency exchange contractsSG&A4 
Interest rate contractsInterest expense1 — 
Commodity contractsCOGS12 (24)
Total$(1)$40 
The effect of fair value and cash flow hedge accounting on the Consolidated Income Statement for the quarters ended April 3, 2021 and March 28, 2020:
April 3, 2021March 28, 2020
(millions)Interest ExpenseInterest Expense
Total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value or cash flow hedges are recorded$59 $64 
Gain (loss) on fair value hedging relationships:
Interest contracts:
Hedged items6 (1)
Derivatives designated as hedging instruments(7)
Gain (loss) on cash flow hedging relationships:
Interest contracts:
Amount of gain (loss) reclassified from AOCI into income(5)(2)
Available-for-sale securities
April 3, 2021January 2, 2021
UnrealizedUnrealized
(millions)CostGain (Loss)Market ValueCostGain (Loss)Market Value
Corporate bonds$58 $1 $59 $62 $$65