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Fair Value Measurements and Financial Instruments
 9 Months Ended
Sep. 30, 2022
Fair Value Disclosures [Abstract]  
Fair Value Measurements and Financial Instruments Fair Value Measurements and Financial Instruments
The Company uses available market information and other valuation methodologies in assessing the fair value of financial instruments. Judgment is required in interpreting market data to develop the estimates of fair value and, accordingly, changes in assumptions or the estimation methodologies may affect the fair value estimates. The Company is exposed to the risk of credit loss in the event of nonperformance by counterparties to financial instrument contracts; however, nonperformance is considered unlikely and any nonperformance is unlikely to be material, as it is the Company’s policy to contract only with diverse, credit-worthy counterparties based upon both strong credit ratings and other credit considerations.

The Company is exposed to market risk from foreign currency exchange rates, interest rates and commodity price fluctuations. Volatility relating to these exposures is managed on a global basis by utilizing a number of techniques, including working capital management, sourcing strategies, selling price increases, selective borrowings in local currencies and entering into selective derivative instrument transactions, issued with standard features, in accordance with the Company’s treasury and risk management policies, which prohibit the use of derivatives for speculative purposes and leveraged derivatives for any purpose. It is the Company’s policy to enter into derivative instrument contracts with terms that match the underlying exposure being hedged.

The Company’s derivative instruments include interest rate swap contracts, forward-starting interest rate swaps, foreign currency contracts and commodity contracts. The Company utilizes interest rate swap contracts to manage its targeted mix of fixed and floating rate debt, and these swaps are valued using observable benchmark rates (Level 2 valuation). The Company utilizes forward-starting interest rate swaps to mitigate the risk of variability in interest rate for future debt issuances and these swaps are valued using observable benchmark rates (Level 2 valuation). The Company utilizes foreign currency contracts, including forward and swap contracts, option contracts, local currency deposits and local currency borrowings to hedge portions of its foreign currency purchases, assets and liabilities arising in the normal course of business and the net investment in certain foreign subsidiaries. These contracts are valued using observable market rates (Level 2 valuation). Commodity futures contracts are utilized to hedge the purchases of raw materials used in production. These contracts are measured using quoted commodity exchange prices (Level 1 valuation). The duration of foreign currency and commodity contracts generally does not exceed 12 months.

The following table summarizes the fair value of the Company’s derivative instruments and other financial instruments which are carried at fair value in the Company’s Condensed Consolidated Balance Sheets at September 30, 2022 and December 31, 2021:
 AssetsLiabilities
  
Account		Fair ValueAccountFair Value
Designated derivative instrumentsSeptember 30, 2022December 31, 2021 September 30, 2022December 31, 2021
Interest rate swap contractsOther current assets$— $5 Other accruals$1 $— 
Forward-starting interest rate swapsOther current assets— — Other accruals— — 
Forward-starting interest rate swapsOther assets— 20 Other liabilities— 21 
Foreign currency contractsOther current assets64 22 Other accruals14 6 
Commodity contractsOther current assets— 2 Other accruals— — 
Total designated$64 $49  $15 $27 
Other financial instruments     
Marketable securitiesOther current assets$208 $34    
Total other financial instruments$208 $34    
The carrying amount of cash, cash equivalents, marketable securities, accounts receivable and short-term debt approximated fair value as of September 30, 2022 and December 31, 2021. The estimated fair value of the Company’s long-term debt, including the current portion, as of September 30, 2022 and December 31, 2021, was $7,615 and $7,651, respectively, and the related carrying value was $8,232 and $7,206, respectively. In August 2022, the Company issued $500 of three-year Senior Notes at a fixed coupon rate of 3.100%, $500 of five-year Senior Notes at a fixed coupon rate of 3.100% and $500 of ten-year Senior Notes at a fixed coupon rate of 3.250%. The estimated fair value of long-term debt was derived principally from quoted prices on the Company’s outstanding fixed-term notes (Level 2 valuation).

The following amounts were recorded on the Condensed Consolidated Balance Sheet related to the cumulative basis adjustment for fair value hedges as of:
September 30, 2022December 31, 2021
Long-term debt:  
Carrying amount of hedged item$399 $405 
Cumulative hedging adjustment included in the carrying amount— 5 
The following tables present the notional values as of:
 September 30, 2022
 Foreign Currency ContractsForeign Currency DebtInterest Rate Swaps Forward-Starting Interest Rate SwapsCommodity Contracts 
Total
Fair Value Hedges $596 $— $400 $— $— $996 
Cash Flow Hedges 792 — — — 28 820 
Net Investment Hedges444 3,838 — — — 4,282 
 December 31, 2021
 Foreign Currency ContractsForeign Currency DebtInterest Rate SwapsForward-Starting Interest Rate SwapsCommodity Contracts 
Total
Fair Value Hedges $566 $— $400 $— $— $966 
Cash Flow Hedges 873 — — 700 24 1,597 
Net Investment Hedges173 4,600 — — — 4,773 
The following tables present the location and amount of gains (losses) recognized on the Company’s Condensed Consolidated Statements of Income:
Three Months Ended September 30,
 20222021
Cost of sales Selling, general and administrative expensesInterest (income) expense, netCost of salesSelling, general and administrative expensesInterest (income) expense, net
Interest rate swaps designated as fair value hedges:
Derivative instrument$— $— $(12)$— $— $2 
Hedged items— — 12 — — (2)
Foreign currency contracts designated as fair value hedges:
Derivative instrument— 17 — — 1 — 
Hedged items— (17)— — (1)— 
Foreign currency contracts designated as cash flow hedges:
Amount reclassified from OCI4 — — (2)— — 
Commodity contracts designated as cash flow hedges:
Amount reclassified from OCI— — — — — — 
Total gain (loss) on hedges recognized in income$4 $— $— $(2)$— $— 

Nine Months Ended September 30,
 20222021
Cost of sales Selling, general and administrative expensesInterest (income) expense, netCost of salesSelling, general and administrative expensesInterest (income) expense, net
Interest rate swaps designated as fair value hedges:
Derivative instrument$— $— $(6)$— $— $6 
Hedged items— — 6 — — (6)
Foreign currency contracts designated as fair value hedges:
Derivative instrument— 31 — — (4)— 
Hedged items— (31)— — 4 — 
Foreign currency contracts designated as cash flow hedges:
Amount reclassified from OCI9 — — (14)— — 
Commodity contracts designated as cash flow hedges:
Amount reclassified from OCI6 — — 5 — — 
Total gain (loss) on hedges recognized in income$15 $— $— $(9)$— $— 
The following table presents the location and amount of unrealized gains (losses) included in OCI:
 Three Months Ended
September 30,
20222021
Foreign currency contracts designated as cash flow hedges:
Gain (loss) recognized in OCI$11 $8 
Forward-starting interest rate swaps designated as cash flow hedges:
Gain (loss) recognized in OCI(39)12 
Commodity contracts designated as cash flow hedges:
Gain (loss) recognized in OCI— (2)
Foreign currency contracts designated as net investment hedges:
Gain (loss) on instruments12 19 
Gain (loss) on hedged items(12)(19)
Foreign currency debt designated as net investment hedges:
Gain (loss) on instruments276 112 
Gain (loss) on hedged items(276)(112)
Total unrealized gain (loss) on hedges recognized in OCI$(28)$18 

 
Nine Months Ended
September 30,
20222021
Foreign currency contracts designated as cash flow hedges:
Gain (loss) recognized in OCI$24 $12 
Forward-starting interest rate swaps designated as cash flow hedges:
Gain (loss) recognized in OCI85 10 
Commodity contracts designated as cash flow hedges:
Gain (loss) recognized in OCI4 — 
Foreign currency contracts designated as net investment hedges:
Gain (loss) on instruments15 23 
Gain (loss) on hedged items(15)(23)
Foreign currency debt designated as net investment hedges:
Gain (loss) on instruments636 261 
Gain (loss) on hedged items(636)(261)
Total unrealized gain (loss) on hedges recognized in OCI$113 $22