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Fair Value Measurements (Tables)
 9 Months Ended
Oct. 01, 2016
Fair Value Disclosures [Abstract]  
Financial Assets and Liabilities Carried at Fair Value
Financial assets and liabilities carried at fair value as of October 1, 2016, are classified below (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Investments related to the deferred compensation plan
$
11

 
$
—

 
$
—

 
$
11

Total Assets at fair value
$
11

 
$
—

 
$
—

 
$
11

Liabilities:
 
 
 
 
 
 
 
Forward interest rate swap contracts (2)
$
—

 
$
37

 
$
—

 
$
37

Derivative contracts-foreign currency (1)
3

 
5

 
—

 
8

Liabilities related to the deferred compensation plan
11

 
—

 
—

 
11

Total Liabilities at fair value
$
14

 
$
42

 
$
—

 
$
56



Financial assets and liabilities carried at fair value as of December 31, 2015, are classified below (in millions):
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets:
 
 
 
 
 
 
 
Derivative contracts-foreign currency (1)
$
6

 
$
1

 
$
—

 
$
7

Investments related to the deferred compensation plan
9

 
—

 
—

 
9

Total Assets at fair value
$
15

 
$
1

 
$
—

 
$
16

Liabilities:
 
 
 
 
 
 
 
Forward interest rate swap contracts (2)
$
—

 
$
26

 
$
—

 
$
26

Liabilities related to the deferred compensation plan
9

 
—

 
—

 
9

Total Liabilities at fair value
$
9

 
$
26

 
$
—

 
$
35


(1) The fair value of the derivative contracts is calculated as follows:
a. Fair value of a put option contract associated with forecasted sales hedges is calculated using bid and ask
rates for similar contracts.
b. Fair value of regular forward contracts associated with forecasted sales hedges is calculated using the period-end
exchange rate adjusted for current forward points.
c. Fair value of hedges against net assets is calculated at the period-end exchange rate adjusted for current forward
points (Level 2). If the hedge has been traded but not settled at period-end, the fair value is calculated at the
rate at which the hedge is being settled (Level 1). As a result, transfers from Level 2 to Level 1 of the fair
value hierarchy totaled $3 million and $6 million as of October 1, 2016 and December 31, 2015, respectively.
(2) The fair value of forward interest rate swaps is based upon a valuation model that uses relevant observable market inputs
at the quoted intervals, such as forward yield curves, and is adjusted for the Company’s credit risk and the interest rate
swap terms. See gross balance reporting in Note 9 Derivative Instruments.