HEDGING TRANSACTIONS AND DERIVATIVE FINANCIAL INSTRUMENTS (Tables)

6 Months Ended

Jul. 01, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Fair value of derivative instruments designated and qualified as part of hedging relationship

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	July 1, 2022		December 31, 2021
Assets:
Foreign currency contracts	Prepaid expenses and other current assets	$	283	$	151
Foreign currency contracts	Other noncurrent assets	73		27
Interest rate contracts	Prepaid expenses and other current assets	—		1
Interest rate contracts	Other noncurrent assets	—		282
Total assets		$	356	$	461
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	31	$	15
Foreign currency contracts	Other noncurrent liabilities	111		17
Interest rate contracts	Other noncurrent liabilities	916		14
Total liabilities		$	1,058	$	46

1All of the Company’s derivative instruments are carried at fair value in our 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.

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

Derivatives Not Designated as Hedging Instruments

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	July 1, 2022		December 31, 2021
Assets:
Foreign currency contracts	Prepaid expenses and other current assets	$	83	$	53
Foreign currency contracts	Other noncurrent assets	7		—
Commodity contracts	Prepaid expenses and other current assets	208		131
Commodity contracts	Other noncurrent assets	6		3
Other derivative instruments	Prepaid expenses and other current assets	—		9
Total assets		$	304	$	196
Liabilities:
Foreign currency contracts	Accounts payable and accrued expenses	$	47	$	34
Foreign currency contracts	Other noncurrent liabilities	12		9
Commodity contracts	Accounts payable and accrued expenses	69		6
Commodity contracts	Other noncurrent liabilities	23		1
Other derivative instruments	Accounts payable and accrued expenses	8		—
Total liabilities		$	159	$	50

1All of the Company’s derivative instruments are carried at fair value in our 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.

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

Schedule of Cash Flow Hedges Included in Accumulated Other Comprehensive Income (Loss) and Other Comprehensive Income (OCI)

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 July 1, 2022
Foreign currency contracts	$	197	Net operating revenues	$	52
Foreign currency contracts	16		Cost of goods sold	2
Foreign currency contracts	—		Interest expense	(1)
Foreign currency contracts	(114)		Other income (loss) — net	(89)
Total	$	99		$	(36)
Three Months Ended July 2, 2021
Foreign currency contracts	$	7	Net operating revenues	$	(27)
Foreign currency contracts	(6)		Cost of goods sold	(2)
Foreign currency contracts	—		Interest expense	(10)
Foreign currency contracts	(29)		Other income (loss) — net	18
Interest rate contracts	(11)		Interest expense	(85)
Total	$	(39)		$	(106)

	Gain (Loss) Recognized in OCI		Location of Gain (Loss) Recognized in Income	Gain (Loss) Reclassified from AOCI into Income
Six Months Ended July 1, 2022
Foreign currency contracts	$	278	Net operating revenues	$	60
Foreign currency contracts	22		Cost of goods sold	3
Foreign currency contracts	—		Interest expense	(2)
Foreign currency contracts	(119)		Other income (loss) — net	(100)
Total	$	181		$	(39)
Six Months Ended July 2, 2021
Foreign currency contracts	$	(16)	Net operating revenues	$	(50)
Foreign currency contracts	(11)		Cost of goods sold	(3)
Foreign currency contracts	—		Interest expense	(11)
Foreign currency contracts	58		Other income (loss) — net	84
Interest rate contracts	110		Interest expense	(90)
Total	$	141		$	(70)

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location

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
		July 1, 2022		July 2, 2021
Interest rate contracts	Interest expense	$	(474)	$	10
Fixed-rate debt	Interest expense	457		(8)
Net impact to interest expense		$	(17)	$	2
Net impact of fair value hedging instruments		$	(17)	$	2

Hedging Instruments and Hedged Items	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Six Months Ended
		July 1, 2022		July 2, 2021
Interest rate contracts	Interest expense	$	(1,185)	$	(180)
Fixed-rate debt	Interest expense	1,166		182
Net impact to interest expense		$	(19)	$	2
Net impact of fair value hedging instruments		$	(19)	$	2

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

					Cumulative Amount of Fair Value Hedging Adjustments1
	Carrying Values of Hedged Items				Included in the Carrying Values of Hedged Items				Remaining for Which Hedge Accounting Has Been Discontinued
Balance Sheet Location of Hedged Items	July 1, 2022		December 31, 2021		July 1, 2022		December 31, 2021		July 1, 2022		December 31, 2021
Current maturities of long-term debt	$	—	$	200	$	—	$	1	$	—	$	—
Long-term debt	12,453		12,353		(880)		255		212		228

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

Notional values and pretax impact of changes in the fair values of instruments designated as net investment hedges

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 Values				Gain (Loss) Recognized in OCI
	as of				Three Months Ended				Six Months Ended
	July 1, 2022		December 31, 2021		July 1, 2022		July 2, 2021		July 1, 2022		July 2, 2021
Foreign currency contracts	$	—	$	40	$	5	$	1	$	(1)	$	(7)
Foreign currency denominated debt	11,752		12,812		704		(114)		1,059		369
Total	$	11,752	$	12,852	$	709	$	(113)	$	1,058	$	362

Derivative Instruments, Not Designated as Hedging Instruments, Gain (Loss) in Earnings

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
		July 1, 2022		July 2, 2021
Foreign currency contracts	Net operating revenues	$	22	$	1
Foreign currency contracts	Cost of goods sold	10		1
Foreign currency contracts	Other income (loss) — net	(4)		32
Commodity contracts	Cost of goods sold	(155)		128
Other derivative instruments	Selling, general and administrative expenses	(18)		12
Total		$	(145)	$	174

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income	Gain (Loss) Recognized in Income
		Six Months Ended
		July 1, 2022		July 2, 2021
Foreign currency contracts	Net operating revenues	$	7	$	—
Foreign currency contracts	Cost of goods sold	23		(7)
Foreign currency contracts	Other income (loss) — net	38		4
Interest rate contracts	Interest expense	—		(187)
Commodity contracts	Cost of goods sold	5		210
Other derivative instruments	Selling, general and administrative expenses	(21)		20
Other derivative instruments	Other income (loss) — net	—		(3)
Total		$	52	$	37