Derivatives (Tables)

9 Months Ended

Sep. 30, 2017

Derivatives

Gain (loss) on derivative instruments designated as cash flow hedges

The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative instruments designated as cash flow hedges are provided in the following table.

			Pretax Gain (Loss) Recognized in
	Pretax Gain (Loss)		Income on Effective Portion of			Ineffective Portion of Gain
	Recognized in Other		Derivative as a Result of			(Loss) on Derivative and
	Comprehensive		Reclassification from			Amount Excluded from
	Income on Effective		Accumulated Other			Effectiveness Testing
Three months ended September 30, 2017	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(77)	Cost of sales	$	(2)	Cost of sales	$	—
Interest rate swap contracts		(3)	Interest expense		—	Interest expense		—
Total	$	(80)		$	(2)		$	—

Nine months ended September 30, 2017	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(249)	Cost of sales	$	21	Cost of sales	$	—
Interest rate swap contracts		(6)	Interest expense		—	Interest expense		—
Total	$	(255)		$	21		$	—

Three months ended September 30, 2016	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(47)	Cost of sales	$	24	Cost of sales	$	—
Interest rate swap contracts		3	Interest expense		—	Interest expense		—
Total	$	(44)		$	24		$	—

Nine months ended September 30, 2016	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(178)	Cost of sales	$	105	Cost of sales	$	—
Interest rate swap contracts		(2)	Interest expense		(1)	Interest expense		—
Total	$	(180)		$	104		$	—

Gain (loss) on derivative instruments designated as fair value hedges

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments designated as fair value hedges and similar information relative to the hedged items are as follows:

	Gain (Loss) on Derivative			Gain (Loss) on Hedged Item
Three months ended September 30, 2017	Recognized in Income			Recognized in Income
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	—	Interest expense	$	—
Total		$	—		$	—

Nine months ended September 30, 2017
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(4)	Interest expense	$	4
Total		$	(4)		$	4

Three months ended September 30, 2016
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(10)	Interest expense	$	10
Total		$	(10)		$	10

Nine months ended September 30, 2016
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	24	Interest expense	$	(24)
Total		$	24		$	(24)

Gain (loss) on derivative and non-derivative instruments designated as net investment hedges

The location in the consolidated statements of income and comprehensive income and amounts of gains and losses related to derivative and nonderivative instruments designated as net investment hedges are as follows. There were no reclassifications of the effective portion of net investment hedges out of accumulated other comprehensive income into income for the periods presented in the table below.

	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation
	within Other		Ineffective Portion of Gain (Loss) on
	Comprehensive Income		Instrument and Amount Excluded
	on Effective Portion of		from Effectiveness Testing
Three months ended September 30, 2017	Instrument		Recognized in Income
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(179)	N/A	$	—
Foreign currency forward contracts		(9)	Cost of sales		1
Total	$	(188)		$	1

Nine months ended September 30, 2017	Comprehensive Income		Instrument and Amount Excluded
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(570)	N/A	$	—
Foreign currency forward contracts		(36)	Cost of sales		6
Total	$	(606)		$	6

Three months ended September 30, 2016	Comprehensive Income		Instrument and Amount Excluded
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(55)	N/A	$	—
Foreign currency forward contracts		(14)	Cost of sales		—
Total	$	(69)		$	—

Nine months ended September 30, 2016	Comprehensive Income		Instrument and Amount Excluded
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(105)	N/A	$	—
Foreign currency forward contracts		(41)	Cost of sales		1
Total	$	(146)		$	1

Gain (loss) on derivative instruments not designated as hedging instruments

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows:

	Three months ended September 30, 2017			Nine months ended September 30, 2017
	Gain (Loss) on Derivative Recognized in			Gain (Loss) on Derivative Recognized in
	Income			Income
(Millions)	Location	Amount		Location	Amount
Foreign currency forward/option contracts	Cost of sales	$	3	Cost of sales	$	8
Foreign currency forward contracts	Interest expense		(67)	Interest expense		(163)
Total		$	(64)		$	(155)

	Three months ended September 30, 2016			Nine months ended September 30, 2016
	Gain (Loss) on Derivative Recognized in			Gain (Loss) on Derivative Recognized in
	Income			Income
(Millions)	Location	Amount		Location	Amount
Foreign currency forward/option contracts	Cost of sales	$	(1)	Cost of sales	$	(7)
Foreign currency forward contracts	Interest expense		17	Interest expense		41
Total		$	16		$	34

Location and Fair Value of Derivative Instruments

	Gross		Assets			Liabilities
September 30, 2017	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,215	Other current assets	$	12	Other current liabilities	$	80
Foreign currency forward/option contracts		1,431	Other assets		24	Other liabilities		52
Interest rate swap contracts		450	Other current assets		—	Other current liabilities		1
Interest rate swap contracts		1,303	Other assets		22	Other liabilities		2
Total derivatives designated as hedging instruments				$	58		$	135
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	6,414	Other current assets	$	19	Other current liabilities	$	47
Total derivatives not designated as hedging instruments				$	19		$	47
Total derivative instruments				$	77		$	182

	Gross		Assets			Liabilities
December 31, 2016	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,160	Other current assets	$	107	Other current liabilities	$	9
Foreign currency forward/option contracts		1,459	Other assets		86	Other liabilities		3
Interest rate swap contracts		1,953	Other assets		25	Other current liabilities		1
Total derivatives designated as hedging instruments				$	218		$	13
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	5,655	Other current assets	$	41	Other current liabilities	$	82
Total derivatives not designated as hedging instruments				$	41		$	82
Total derivative instruments				$	259		$	95

Offsetting Assets

Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties

			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Assets		Gross Amount of
	Presented in the		Eligible Offsetting
September 30, 2017	Consolidated		Recognized		Cash Collateral		Net Amount of
(Millions)	Balance Sheet		Derivative Liabilities		Received		Derivative Assets
Derivatives subject to master netting agreements	$	77	$	34	$	—	$	43
Derivatives not subject to master netting agreements		—						—
Total	$	77					$	43

December 31, 2016
(Millions)
Derivatives subject to master netting agreements	$	259	$	39	$	—	$	220
Derivatives not subject to master netting agreements		—						—
Total	$	259					$	220

Offsetting Liabilities

Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties

			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Liabilities		Gross Amount of
	Presented in the		Eligible Offsetting
September 30, 2017	Consolidated		Recognized		Cash Collateral		Net Amount of
(Millions)	Balance Sheet		Derivative Assets		Pledged		Derivative Liabilities
Derivatives subject to master netting agreements	$	182	$	34	$	—	$	148
Derivatives not subject to master netting agreements		—						—
Total	$	182					$	148

December 31, 2016
(Millions)
Derivatives subject to master netting agreements	$	93	$	39	$	—	$	54
Derivatives not subject to master netting agreements		2						2
Total	$	95					$	56