Derivatives (Tables)

9 Months Ended

Sep. 30, 2019

Derivatives

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

	Pretax Gain (Loss)
	Recognized in Other		Pretax Gain (Loss) Reclassified
	Comprehensive		from Accumulated Other
	Income on Derivative		Comprehensive Income into Income
Three months ended September 30, 2019 (Millions)	Amount		Location	Amount
Foreign currency forward/option contracts	$	105	Cost of sales	$	22
Interest rate swap contracts		(74)	Interest expense		(1)
Total	$	31		$	21

Nine months ended September 30, 2019 (Millions)	Amount		Location	Amount
Foreign currency forward/option contracts	$	137	Cost of sales	$	50
Interest rate swap contracts		(123)	Interest expense		(2)
Total	$	14		$	48

			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
	Portion of Derivative		Comprehensive Income			Recognized in Income
Three months ended September 30, 2018 (Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	12	Cost of sales	$	(37)	Cost of sales	$	—
Interest rate swap contracts		10	Interest expense		—	Interest expense		—
Total	$	22		$	(37)		$	—

Nine months ended September 30, 2018 (Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	112	Cost of sales	$	(98)	Cost of sales	$	—
Interest rate swap contracts		10	Interest expense		(1)	Interest expense		—
Total	$	122		$	(99)		$	—

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

	Gain (Loss) on Derivative			Gain (Loss) on Hedged Item
	Recognized in Income			Recognized in Income
Three months ended September 30, 2018 (Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	—	Interest expense	$	—
Total		$	—		$	—

Nine months ended September 30, 2018 (Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(12)	Interest expense	$	12
Total		$	(12)		$	12

The following amounts were recorded on the consolidated balance sheet related to cumulative basis adjustments for fair value hedges:

					Cumulative Amount of Fair Value Hedging
	Carrying Value of the				Adjustment Included in the Carrying Value
	Hedged Liabilities (in millions)				of the Hedged Liabilities (in millions)
Location on the Consolidated Balance Sheet	September 30, 2019		December 31, 2018		September 30, 2019		December 31, 2018
Short-term borrowings and current portion of long-term debt	$	499	$	596	$	(1)	$	(4)
Long-term debt		771		1,276		26		18
Total	$	1,270	$	1,872	$	25	$	14

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

	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation		Amount Excluded
	within Other		from Effectiveness Testing
	Comprehensive Income		Recognized in Income
Three months ended September 30, 2019 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	177	Cost of sales	$	—
Foreign currency forward contracts		38	Cost of sales		6
Total	$	215		$	6

Nine months ended September 30, 2019 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	205	Cost of sales	$	—
Foreign currency forward contracts		43	Cost of sales		18
Total	$	248		$	18

	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
	Instrument		Recognized in Income
Three months ended September 30, 2018 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(14)	Cost of sales	$	—
Foreign currency forward contracts		(3)	Cost of sales		1
Total	$	(17)		$	1

Nine months ended September 30, 2018 (Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	157	Cost of sales	$	(2)
Foreign currency forward contracts		14	Cost of sales		1
Total	$	171		$	(1)

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

	Three months ended September 30, 2019			Nine months ended September 30, 2019
	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	$	6	Cost of sales	$	4
Foreign currency forward contracts	Interest expense		(8)	Interest expense		(26)
Total		$	(2)		$	(22)

	Three months ended September 30, 2018			Nine months ended September 30, 2018
	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	$	11	Cost of sales	$	11
Foreign currency forward contracts	Interest expense		(7)	Interest expense		(98)
Total		$	4		$	(87)

Location in consolidated statement of income and pre-tax amounts recognized in income related to derivative instruments designated in cash flow or fair value hedging relationship

	Location and Amount of Gain (Loss) Recognized in Income				Location and Amount of Gain (Loss) Recognized in Income
	Three months ended September 30, 2019				Nine months ended September 30, 2019
(Millions)	Cost of sales		Other expense (income), net			Cost of Goods Sold		Other expense (income), net)
Total amounts of income and expense line items presented in the consolidated statement of income in which the effects of cash flow or fair value hedges are recorded	$	4,188	$	45	$	12,811	$	349
The effects of fair value and cash flow hedging:
Gain or (loss) on cash flow hedging relationships:
Foreign currency forward/option contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income	$	22	$	—	$	50	$	—
Interest rate swap contracts:
Amount of gain or (loss) reclassified from accumulated other comprehensive income into income		—		(1)		—		(2)
Gain or (loss) on fair value hedging relationships:
Interest rate swap contracts:
Hedged items	$	—	$	1	$	—	$	(11)
Derivatives designated as hedging instruments		—		(1)		—		11

Location and Fair Value of Derivative Instruments

	Gross		Assets			Liabilities
September 30, 2019	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,235	Other current assets	$	128	Other current liabilities	$	2
Foreign currency forward/option contracts		1,110	Other assets		70	Other liabilities		1
Interest rate swap contracts		500	Other current assets		—	Other current liabilities		1
Interest rate swap contracts		603	Other assets		20	Other liabilities		—
Total derivatives designated as hedging instruments				$	218		$	4
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	1,931	Other current assets	$	9	Other current liabilities	$	10
Total derivatives not designated as hedging instruments				$	9		$	10
Total derivative instruments				$	227		$	14

	Gross		Assets			Liabilities
December 31, 2018	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,277	Other current assets	$	74	Other current liabilities	$	12
Foreign currency forward/option contracts		1,099	Other assets		39	Other liabilities		4
Interest rate swap contracts		1,000	Other current assets		—	Other current liabilities		14
Interest rate swap contracts		1,403	Other assets		19	Other liabilities		17
Total derivatives designated as hedging instruments				$	132		$	47
Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	2,484	Other current assets	$	14	Other current liabilities	$	6
Total derivatives not designated as hedging instruments				$	14		$	6
Total derivative instruments				$	146		$	53

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, 2019	Consolidated		Recognized		Cash Collateral		Net Amount of
(Millions)	Balance Sheet		Derivative Liabilities		Received		Derivative Assets
Derivatives subject to master netting agreements	$	227	$	9	$	—	$	218
Derivatives not subject to master netting agreements		—						—
Total	$	227					$	218

December 31, 2018
(Millions)
Derivatives subject to master netting agreements	$	146	$	38	$	—	$	108
Derivatives not subject to master netting agreements		—						—
Total	$	146					$	108

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, 2019	Consolidated		Recognized		Cash Collateral		Net Amount of
(Millions)	Balance Sheet		Derivative Assets		Pledged		Derivative Liabilities
Derivatives subject to master netting agreements	$	14	$	9	$	—	$	5
Derivatives not subject to master netting agreements		—						—
Total	$	14					$	5

December 31, 2018
(Millions)
Derivatives subject to master netting agreements	$	53	$	38	$	—	$	15
Derivatives not subject to master netting agreements		—						—
Total	$	53					$	15