Hedging Transactions and Derivative Financial Instruments (Tables)

9 Months Ended

Sep. 25, 2020

Foreign Currency Fair Value Hedge Derivative [Line Items]

Derivative instruments, fair value, designated as hedging instruments

The following table presents the fair values of the Company's derivative instruments that were designated and qualified as part of a hedging relationship (in millions):

		Fair Value1,2
Derivatives Designated as Hedging Instruments	Balance Sheet Location1	September 25, 2020		December 31, 2019
Assets:
Foreign currency contracts	Prepaid expenses and other assets	$	17	$	24
Foreign currency contracts	Other assets	73		91
Interest rate contracts	Prepaid expenses and other assets	4		10
Interest rate contracts	Other assets	683		427
Total assets		$	777	$	552
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	46	$	40
Foreign currency contracts	Other liabilities	10		48
Commodity contracts	Accounts payable and accrued expenses	1		—
Interest rate contracts	Other liabilities	—		21
Total liabilities		$	57	$	109

¹ All of the Company's derivative instruments are carried at fair value in our condensed consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 15 for the net presentation of the Company's derivative instruments.

² Refer to Note 15 for additional information related to the estimated fair value.

Schedule of Other Derivatives Not Designated as Hedging Instruments, Statements of Financial Performance and Financial Position, Location [Table Text Block]

The following table presents the fair values of the Company's derivative instruments that were not designated as hedging instruments (in millions):

		Fair Value1,2
Derivatives Not Designated as Hedging Instruments	Balance Sheet Location1	September 25, 2020		December 31, 2019
Assets:
Foreign currency contracts	Prepaid expenses and other assets	$	34	$	13
Commodity contracts	Prepaid expenses and other assets	19		8
Commodity contracts	Other assets	4		2
Other derivative instruments	Prepaid expenses and other assets	8		12
Other derivative instruments	Other assets	3		1
Total assets		$	68	$	36
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	41	$	39
Commodity contracts	Accounts payable and accrued expenses	36		13
Commodity contracts	Other liabilities	11		1
Other derivative instruments	Accounts payable and accrued expenses	5		—
Total liabilities		$	93	$	53

¹ All of the Company's derivative instruments are carried at fair value in our condensed consolidated balance sheets after considering the impact of legally enforceable master netting agreements and cash collateral held or placed with the same counterparties, as applicable. Current disclosure requirements mandate that derivatives must also be disclosed without reflecting the impact of master netting agreements and cash collateral. Refer to Note 15 for the net presentation of the Company's derivative instruments.

² Refer to Note 15 for additional information related to the estimated fair value.

Derivative instruments, designated as hedging instruments, gain (loss) in statement of financial performance

The following tables present the pretax impact that changes in the fair values of derivatives designated as cash flow hedges had on other comprehensive income ("OCI"), AOCI and earnings (in millions):

	Gain (Loss) Recognized in OCI		Location of Gain (Loss) Recognized in Income	Gain (Loss) Reclassified from AOCI into Income
Three Months Ended September 25, 2020
Foreign currency contracts	$	(84)	Net operating revenues	$	(21)
Foreign currency contracts	(4)		Cost of goods sold	2
Foreign currency contracts	—		Interest expense	(6)
Foreign currency contracts	122		Other income (loss) — net	100
Interest rate contracts	9		Interest expense	(14)
Commodity contracts	(2)		Cost of goods sold	(1)
Total	$	41		$	60
Three Months Ended September 27, 2019
Foreign currency contracts	$	71	Net operating revenues	$	(5)
Foreign currency contracts	3		Cost of goods sold	2
Foreign currency contracts	—		Interest expense	(3)
Foreign currency contracts	(46)		Other income (loss) — net	(46)
Interest rate contracts	(30)		Interest expense	(10)
Commodity contracts	1		Cost of goods sold	—
Total	$	(1)		$	(62)

	Gain (Loss) Recognized in OCI		Location of Gain (Loss) Recognized in Income	Gain (Loss) Reclassified from AOCI into Income
Nine Months Ended September 25, 2020
Foreign currency contracts	$	(61)	Net operating revenues	$	(22)
Foreign currency contracts	6		Cost of goods sold	7
Foreign currency contracts	—		Interest expense	(10)
Foreign currency contracts	21		Other income (loss) — net	71
Interest rate contracts	21		Interest expense	(35)
Commodity contracts	(2)		Cost of goods sold	(1)
Total	$	(15)		$	10
Nine Months Ended September 27, 2019
Foreign currency contracts	$	44	Net operating revenues	$	2
Foreign currency contracts	1		Cost of goods sold	9
Foreign currency contracts	—		Interest expense	(7)
Foreign currency contracts	(99)		Other income (loss) — net	(139)
Interest rate contracts	(47)		Interest expense	(30)
Commodity contracts	1		Cost of goods sold	—
Total	$	(100)		$	(165)

Derivative instruments, fair value hedges, gain (loss) recognized in income

The following tables summarize the pretax impact that changes in the fair values of derivatives designated as fair value hedges had on earnings (in millions):

Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Three Months Ended
		September 25, 2020		September 27, 2019
Interest rate contracts	Interest expense	$	94	$	206
Fixed-rate debt	Interest expense	(97)		(200)
Net impact to interest expense		$	(3)	$	6
Foreign currency contracts	Other income (loss) — net	$	3	$	—
Available-for-sale securities	Other income (loss) — net	(3)		—
Net impact to other income (loss) — net		$	—	$	—
Net impact of fair value hedging instruments		$	(3)	$	6

Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Nine Months Ended
		September 25, 2020		September 27, 2019
Interest rate contracts	Interest expense	$	284	$	647
Fixed-rate debt	Interest expense	(281)		(637)
Net impact to interest expense		$	3	$	10
Foreign currency contracts	Other income (loss) — net	$	3	$	—
Available-for-sale securities	Other income (loss) — net	(3)		—
Net impact to other income (loss) — net		$	—	$	—
Net impact of fair value hedging instruments		$	3	$	10

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

The following table summarizes the amounts recorded in the condensed consolidated balance sheets related to hedged items in fair value hedging relationships (in millions):

	Carrying Value of Hedged Items				Cumulative Amount of Fair Value Hedging Adjustments Included in Carrying Value of Hedged Items1
Balance Sheet Location of Hedged Items	September 25, 2020		December 31, 2019		September 25, 2020		December 31, 2019
Cash and cash equivalents	$	294	$	—	$	—	$	—
Marketable securities	201		—		—		—
Current maturities of long-term debt	2,038		1,004		(2)		5
Long-term debt	10,685		12,087		670		448

¹ Cumulative amount of fair value hedging adjustments does not include changes due to foreign currency exchange rates.

Schedule of Net Investment Hedges in Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table summarizes the notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges (in millions):

	Notional Amount				Gain (Loss) Recognized in OCI
	as of				Three Months Ended				Nine Months Ended
	September 25, 2020		December 31, 2019		September 25, 2020		September 27, 2019		September 25, 2020		September 27, 2019
Foreign currency contracts	$	—	$	—	$	(23)	$	13	$	(4)	$	42
Foreign currency denominated debt	12,699		12,334		(445)		476		(452)		444
Total	$	12,699	$	12,334	$	(468)	$	489	$	(456)	$	486

Schedule of Derivative Instruments Not Designated as Hedging Instruments Gain (Loss) in Statement of Financial Performance [Table Text Block]

The following tables present the pretax impact that changes in the fair values of derivatives not designated as hedging instruments had on earnings (in millions):

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Three Months Ended
		September 25, 2020		September 27, 2019
Foreign currency contracts	Net operating revenues	$	2	$	15
Foreign currency contracts	Cost of goods sold	(17)		2
Foreign currency contracts	Other income (loss) — net	53		(21)
Interest rate contracts	Interest expense	2		—
Commodity contracts	Cost of goods sold	34		(60)
Other derivative instruments	Selling, general and administrative expenses	20		4
Other derivative instruments	Other income (loss) — net	—		5
Total		$	94	$	(55)

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Nine Months Ended
		September 25, 2020		September 27, 2019
Foreign currency contracts	Net operating revenues	$	64	$	2
Foreign currency contracts	Cost of goods sold	10		4
Foreign currency contracts	Other income (loss) — net	(33)		(46)
Interest rate contracts	Interest expense	2		—
Commodity contracts	Cost of goods sold	(33)		(58)
Other derivative instruments	Selling, general and administrative expenses	(12)		32
Other derivative instruments	Other income (loss) — net	(55)		39
Total		$	(57)	$	(27)