Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2020

Investments, Debt and Equity Securities [Abstract]

Fair Value of Financial Instruments

The following table summarizes the fair value of financial instruments at September 30, 2020 and December 31, 2019:

Fair Value of Financial Instruments	Sep 30, 2020								Dec 31, 2019
In millions	Cost		Gain		Loss		Fair Value		Cost		Gain		Loss		Fair Value
Cash equivalents:
Held-to-maturity securities 1	$	696	$	—	$	—	$	696	$	220	$	—	$	—	$	220
Money market funds	691		—		—		691		408		—		—		408
Total cash equivalents	$	1,387	$	—	$	—	$	1,387	$	628	$	—	$	—	$	628
Marketable securities 2	$	29	$	1	$	—	$	30	$	21	$	—	$	—	$	21
Other investments:
Debt securities:
Government debt 3	$	476	$	30	$	(15)	$	491	$	533	$	33	$	(11)	$	555
Corporate bonds	822		81		(28)		875		944		80		(10)		1,014
Total debt securities	$	1,298	$	111	$	(43)	$	1,366	$	1,477	$	113	$	(21)	$	1,569
Equity securities 4	8		1		(1)		8		10		6		(1)		15
Total other investments	$	1,306	$	112	$	(44)	$	1,374	$	1,487	$	119	$	(22)	$	1,584
Total cash equivalents, marketable securities and other investments	$	2,722	$	113	$	(44)	$	2,791	$	2,136	$	119	$	(22)	$	2,233
Long-term debt including debt due within one year 5	$	(17,045)	$	196	$	(2,792)	$	(19,641)	$	(16,410)	$	7	$	(2,258)	$	(18,661)
Derivatives relating to:
Interest rates 6	$	—	$	154	$	(286)	$	(132)	$	—	$	8	$	(283)	$	(275)
Foreign currency	—		23		(72)		(49)		—		101		(21)		80
Commodities 6	—		110		(146)		(36)		—		59		(115)		(56)
Total derivatives	$	—	$	287	$	(504)	$	(217)	$	—	$	168	$	(419)	$	(251)

1.The Company's held-to-maturity securities primarily included treasury bills and time deposits.

2.The Company’s investments in marketable securities are included in “Other current assets” in the consolidated balance sheets.

3.U.S. Treasury obligations, U.S. agency obligations, U.S. agency mortgage-backed securities and other municipalities’ obligations.

4.Equity securities with a readily determinable fair value.

5.Cost includes fair value hedge adjustment gains of $67 million at September 30, 2020 and $1 million at December 31, 2019 on $2,714 million of debt at September 30, 2020 and $3,490 million of debt at December 31, 2019.

6.Presented net of cash collateral where master netting arrangements allow.

Investing Results

The following table provides the investing results from available-for-sale securities for the nine months ended September 30, 2020 and 2019:

Investing Results	Nine Months Ended
In millions	Sep 30, 2020		Sep 30, 2019
Proceeds from sales of available-for-sale securities	$	742	$	904
Gross realized gains	$	84	$	32
Gross realized losses	$	(25)	$	(14)

Contractual Maturities of Debt Securities

The following table summarizes the contractual maturities of the Company's investments in debt securities:

Contractual Maturities of Debt Securities at Sep 30, 2020 1	Cost		Fair Value
In millions
Within one year	$	27	$	24
One to five years	378		393
Six to ten years	482		501
After ten years	411		448
Total	$	1,298	$	1,366

1.Includes marketable securities with maturities of less than one year.

Fair Value and Gross Unrealized Losses of Investments Temporarily Impaired

The following table provides the fair value and gross unrealized losses of the Company’s investments in debt securities that were deemed to be temporarily impaired at September 30, 2020 and December 31, 2019, aggregated by investment category:

Temporarily Impaired Debt Securities	Less than 12 months				12 months or more				Total
	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
In millions
Sep 30, 2020
Government debt 1	$	66	$	(6)	$	7	$	(9)	$	73	$	(15)
Corporate bonds	158		(15)		23		(13)		181		(28)
Total temporarily impaired debt securities	$	224	$	(21)	$	30	$	(22)	$	254	$	(43)
Dec 31, 2019
Government debt 1	$	55	$	(3)	$	23	$	(8)	$	78	$	(11)
Corporate bonds	79		(3)		52		(7)		131		(10)
Total temporarily impaired debt securities	$	134	$	(6)	$	75	$	(15)	$	209	$	(21)

1.U.S. Treasury obligations, U.S. agency obligations, U.S. agency mortgage-backed securities and other municipalities' obligations.

Equity Securities with and without Readily Determinable Fair Value

Investments in Equity Securities	Sep 30, 2020		Dec 31, 2019
In millions
Readily determinable fair value	$	8	$	15
Not readily determinable fair value	$	184	$	189

Schedule of Notional Amounts of Outstanding Derivative Positions

The notional amounts of the Company's derivative instruments presented on a net basis at September 30, 2020 and December 31, 2019 were as follows:

Notional Amounts - Net	Sep 30, 2020		Dec 31, 2019
In millions
Derivatives designated as hedging instruments:
Interest rate contracts	$	916	$	922
Foreign currency contracts	$	3,455	$	6,253
Derivatives not designated as hedging instruments:
Interest rate contracts	$	105	$	145
Foreign currency contracts	$	8,913	$	5,567

The notional amounts of the Company's commodity derivatives presented on a net basis at September 30, 2020 and December 31, 2019 were as follows:

Commodity Notionals - Net	Sep 30, 2020	Dec 31, 2019	Notional Volume Unit
Derivatives designated as hedging instruments:
Hydrocarbon derivatives	24.3	6.1	million barrels of oil equivalent
Derivatives not designated as hedging instruments:
Hydrocarbon derivatives	0.8	0.1	million barrels of oil equivalent
Power derivatives	41.3	87.5	thousands of megawatt hours

Schedule of Fair Values of Derivative Instruments

The following tables provide the fair value and balance sheet classification of derivative instruments at September 30, 2020 and December 31, 2019:

Fair Value of Derivative Instruments		Sep 30, 2020
In millions	Balance Sheet Classification	Gross		Counterparty and Cash Collateral Netting 1		Net Amounts Included in the Consolidated Balance Sheets
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate contracts	Other current assets	$	120	$	(75)	$	45
Foreign currency contracts	Other current assets	51		(34)		17
Commodity contracts	Other current assets	129		(61)		68
Commodity contracts	Deferred charges and other assets	62		(25)		37
Total		$	362	$	(195)	$	167
Derivatives not designated as hedging instruments:
Interest rate contracts	Deferred charges and other assets	$	109	$	—	$	109
Foreign currency contracts	Other current assets	35		(29)		6
Commodity contracts	Other current assets	7		(2)		5
Total		$	151	$	(31)	$	120
Total asset derivatives		$	513	$	(226)	$	287
Liability derivatives
Derivatives designated as hedging instruments:
Interest rate contracts	Accrued and other current liabilities	$	75	$	(75)	$	—
Interest rate contracts	Other noncurrent obligations	1		—		1
Foreign currency contracts	Accrued and other current liabilities	72		(34)		38
Commodity contracts	Accrued and other current liabilities	129		(65)		64
Commodity contracts	Other noncurrent obligations	101		(25)		76
Total		$	378	$	(199)	$	179
Derivatives not designated as hedging instruments:
Interest rate contracts	Other noncurrent obligations	$	285	$	—	$	285
Foreign currency contracts	Accrued and other current liabilities	63		(29)		34
Commodity contracts	Accrued and other current liabilities	8		(2)		6
Total		$	356	$	(31)	$	325
Total liability derivatives		$	734	$	(230)	$	504

1.Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.

Fair Value of Derivative Instruments		Dec 31, 2019
In millions	Balance Sheet Classification	Gross		Counterparty and Cash Collateral Netting 1		Net Amounts Included in the Consolidated Balance Sheets
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate contracts	Other current assets	$	21	$	(13)	$	8
Foreign currency contracts	Other current assets	105		(36)		69
Commodity contracts	Other current assets	44		(25)		19
Commodity contracts	Deferred charges and other assets	28		(3)		25
Total		$	198	$	(77)	$	121
Derivatives not designated as hedging instruments:
Interest rate contracts	Other current assets	$	14	$	(14)	$	—
Foreign currency contracts	Other current assets	44		(12)		32
Commodity contracts	Other current assets	18		(3)		15
Total		$	76	$	(29)	$	47
Total asset derivatives		$	274	$	(106)	$	168
Liability derivatives
Derivatives designated as hedging instruments:
Interest rate contracts	Accrued and other current liabilities	$	23	$	(13)	$	10
Interest rate contracts	Other noncurrent obligations	1		—		1
Foreign currency contracts	Accrued and other current liabilities	46		(36)		10
Commodity contracts	Accrued and other current liabilities	95		(29)		66
Commodity contracts	Other noncurrent obligations	38		(4)		34
Total		$	203	$	(82)	$	121
Derivatives not designated as hedging instruments:
Interest rate contracts	Accrued and other current liabilities	$	136	$	(14)	$	122
Interest rate contracts	Other noncurrent obligations	150		—		150
Foreign currency contracts	Accrued and other current liabilities	23		(12)		11
Commodity contracts	Accrued and other current liabilities	17		(3)		14
Commodity contracts	Other noncurrent obligations	1		—		1
Total		$	327	$	(29)	$	298
Total liability derivatives		$	530	$	(111)	$	419

1.Counterparty and cash collateral amounts represent the estimated net settlement amount when applying netting and set-off rights included in master netting arrangements between the Company and its counterparties and the payable or receivable for cash collateral held or placed with the same counterparty.

Derivative Instruments, Gain (Loss)

Effect of Derivative Instruments	Amount of gain (loss) recognized in OCI 1				Amount of gain (loss) recognized in income 2				Income Statement Classification
	Three months ended				Three months ended
In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Derivatives designated as hedging instruments:
Fair value hedges:
Interest rate contracts	$	—	$	—	$	—	$	17	Interest expense and amortization of debt discount
Excluded components 3	3		—		—		—		Interest expense and amortization of debt discount
Cash flow hedges:
Interest rate contracts	—		(109)		(1)		—		Interest expense and amortization of debt discount
Foreign currency contracts	(12)		15		(1)		7		Cost of sales
Foreign currency contracts	—		8		—		8		Sundry income (expense) - net
Commodity contracts	42		(29)		(4)		(27)		Cost of sales
Net foreign investment hedges:
Foreign currency contracts	(19)		77		—		—
Excluded components 3	—		—		2		25		Sundry income (expense) - net
Total derivatives designated as hedging instruments	$	14	$	(38)	$	(4)	$	30
Derivatives not designated as hedging instruments:
Interest rate contracts	$	—	$	—	$	(3)	$	(3)	Interest expense and amortization of debt discount
Foreign currency contracts	—		—		(5)		21		Sundry income (expense) - net
Commodity contracts	—		—		(7)		(6)		Cost of sales
Total derivatives not designated as hedging instruments	$	—	$	—	$	(15)	$	12
Total derivatives	$	14	$	(38)	$	(19)	$	42

1.OCI is defined as other comprehensive income (loss).

2.Pretax amounts.

3.The excluded components are related to the time value of the derivatives designated as hedges.

Effect of Derivative Instruments	Amount of gain (loss) recognized in OCI 1				Amount of gain (loss) recognized in income 2				Income Statement Classification
	Nine months ended				Nine months ended
In millions	Sep 30, 2020		Sep 30, 2019		Sep 30, 2020		Sep 30, 2019
Derivatives designated as hedging instruments:
Fair value hedges:
Interest rate contracts	$	—	$	—	$	24	$	17	Interest expense and amortization   of debt discount 3
Excluded components 4	10		(4)		—		—		Interest expense and amortization of debt discount
Cash flow hedges:
Interest rate contracts	—		(345)		(1)		—		Interest expense and amortization of debt discount
Foreign currency contracts	(9)		21		8		23		Cost of sales
Foreign currency contracts	—		10		—		8		Sundry income (expense) - net
Commodity contracts	(23)		(15)		(32)		(53)		Cost of sales
Net foreign investment hedges:
Foreign currency contracts	(3)		(21)		—		—
Excluded components 4	27		152		18		75		Sundry income (expense) - net
Total derivatives designated as hedging instruments	$	2	$	(202)	$	17	$	70
Derivatives not designated as hedging instruments:
Interest rate contracts	$	—	$	—	$	(10)	$	(3)	Interest expense and amortization of debt discount
Foreign currency contracts	—		—		(15)		27		Sundry income (expense) - net
Commodity contracts	—		—		10		(37)		Cost of sales
Total derivatives not designated as hedging instruments	$	—	$	—	$	(15)	$	(13)
Total derivatives	$	2	$	(202)	$	2	$	57

1.OCI is defined as other comprehensive income (loss).

2.Pretax amounts.

3.Gain (loss) recognized in income of derivatives is offset by gain (loss) recognized in income of the hedged item.

4.The excluded components are related to the time value of the derivatives designated as hedges.

Schedule of Hedging Amounts in Accumulated Other Comprehensive Income (Loss) to be Recognized Over Next Fiscal Year

The following table provides the net after-tax amounts expected to be reclassified from AOCL to income within the next 12 months:

Expected Reclassifications from AOCL within the next 12 months	Sep 30, 2020
In millions
Cash flow hedges:
Interest rate contracts	$	(8)
Commodity contracts	$	6
Foreign currency contracts	$	(11)
Net foreign investment hedges:
Excluded components	$	3