XML 41 R29.htm IDEA: XBRL DOCUMENT v3.23.3
Financial Instruments (Notes)
 9 Months Ended
Sep. 30, 2023
Investments, Debt and Equity Securities [Abstract]  
Financial Instruments FINANCIAL INSTRUMENTS
A summary of the Company's financial instruments, risk management policies, derivative instruments and hedging activities can be found in Note 21 to the Consolidated Financial Statements included in the 2022 10-K.

Refer to Note 15 for a summary of the fair value of financial instruments at September 30, 2023 and December 31, 2022.

Debt Securities
The Company's investments in debt securities are primarily classified as available-for-sale. The following table provides investing results from available-for-sale securities for the nine months ended September 30, 2023 and 2022:

Investing ResultsNine Months Ended
In millionsSep 30, 2023Sep 30, 2022
Proceeds from sales of available-for-sale securities$397 $449 
Gross realized gains$59 $40 
Gross realized losses $(18)$(42)

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

Contractual Maturities of Debt Securities at Sep 30, 2023
 CostFair Value
In millions
Within one year$63 $59 
One to five years1,117 1,032 
Six to ten years509 437 
After ten years513 386 
Total$2,202 $1,914 

Equity Securities
There were no material adjustments to the carrying value of the not readily determinable investments for impairment or observable price changes for the three months ended September 30, 2023. There was $4 million of net unrealized losses recognized in earnings on equity securities for the three months ended September 30, 2023 ($2 million of net unrealized losses for the three months ended September 30, 2022). There was $6 million of net unrealized gains recognized in earnings on equity securities for the nine months ended September 30, 2023 ($8 million of net unrealized losses for the nine months ended September 30, 2022).

Investments in Equity SecuritiesSep 30, 2023Dec 31, 2022
In millions
Readily determinable fair value$15 $10 
Not readily determinable fair value$177 $186 
Derivative Instruments
The notional amounts of the Company's derivative instruments at September 30, 2023 and December 31, 2022 were as follows:

Notional Amounts 1
Sep 30, 2023Dec 31, 2022
In millions
Derivatives designated as hedging instruments:
Interest rate contracts$3,000 $1,500 
Foreign currency contracts$8,683 $2,408 
Derivatives not designated as hedging instruments:
Interest rate contracts$140 $3 
Foreign currency contracts$12,921 $8,837 
1.Notional amounts represent the absolute value of open derivative positions at the end of the period. Multi-leg option positions are reflected at the maximum notional position at expiration.

The notional amounts of the Company's commodity derivatives at September 30, 2023 and December 31, 2022 were as follows:

Commodity Notionals 1
Sep 30, 2023Dec 31, 2022Notional Volume Unit
Derivatives designated as hedging instruments:
Hydrocarbon derivatives2.1 19.2 million barrels of oil equivalent
Derivatives not designated as hedging instruments:
Hydrocarbon derivatives0.7 — million barrels of oil equivalent
1.Notional amounts represent the net volume of open derivative positions outstanding at the end of the period.

Maturity Dates of Derivatives Designated as Hedging InstrumentsYear
Interest rate contracts2025
Foreign currency contracts2024
Commodity contracts2026
The following table provides the fair value and balance sheet classification of derivative instruments at September 30, 2023 and December 31, 2022:

Fair Value of Derivative InstrumentsSep 30, 2023Dec 31, 2022
In millionsGross
Counterparty and Cash Collateral Netting 1
Net 2
Gross
Counterparty and Cash Collateral Netting 1
Net 2
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate contracts 3
$8 $(8)$— $351 $(246)$105 
Interest rate contracts 4
61 (61)— — — — 
Foreign currency contracts 3
190 (117)73 58 (39)19 
Commodity contracts 3
54 (37)17 199 (148)51 
Commodity contracts 4
5 (4)1 — — — 
Total$318 $(227)$91 $608 $(433)$175 
Derivatives not designated as hedging instruments:
Interest rate contracts 3
$2 $(2)$— $— $— $— 
Interest rate contracts 4
1 (1)— — — — 
Foreign currency contracts 3
15 (12)3 146 (50)96 
Commodity contracts 3
73 (44)29 22 (1)21 
Commodity contracts 4
6 (1)5 — — — 
Total$97 $(60)$37 $168 $(51)$117 
Total asset derivatives $415 $(287)$128 $776 $(484)$292 
Liability derivatives
Derivatives designated as hedging instruments:
Interest rate contracts 5
$49 $(8)$41 $246 $(246)$— 
Interest rate contracts 6
238 (61)177 — — — 
Foreign currency contracts 5
117 (117)— 58 (39)19 
Commodity contracts 5
61 (44)17 258 (198)60 
Commodity contracts 6
4 (4)— — — — 
Total$469 $(234)$235 $562 $(483)$79 
Derivatives not designated as hedging instruments:
Interest rate contracts 5
$5 $(2)$3 $— $— $— 
Interest rate contracts 6
1 (1)— — — — 
Foreign currency contracts 5
118 (12)106 61 (50)11 
Commodity contracts 5
72 (44)28 12 (11)1 
Commodity contracts 6
4 (1)3 — — — 
Total$200 $(60)$140 $73 $(61)$12 
Total liability derivatives $669 $(294)$375 $635 $(544)$91 
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.
2.Represents the net amounts included in the consolidated balance sheets.
3.Included in "Other current assets" in the consolidated balance sheets.
4.Included in "Deferred charges and other assets" in the consolidated balance sheets.
5.Included in "Accrued and other current liabilities" in the consolidated balance sheets.
6.Included in "Other noncurrent obligations" in the consolidated balance sheets.
Assets and liabilities related to forward contracts, interest rate swaps, currency swaps, options and other conditional or exchange contracts executed with the same counterparty under a master netting arrangement are netted. Collateral accounts are netted with corresponding assets or liabilities, when applicable. The Company posted cash collateral of $26 million at September 30, 2023 ($80 million at December 31, 2022). Cash collateral of $1 million was posted by counterparties with the Company at September 30, 2023 ($2 million at December 31, 2022).

The following table summarizes the gain (loss) of derivative instruments in the consolidated statements of income and comprehensive income for the three and nine months ended September 30, 2023 and 2022:

Effect of Derivative Instruments
Gain (loss) recognized in OCI 1
Gain (loss) recognized in income 2
Three Months EndedNine Months EndedThree Months EndedNine Months Ended
In millionsSep 30, 2023Sep 30, 2022Sep 30, 2023Sep 30, 2022Sep 30, 2023Sep 30, 2022Sep 30, 2023Sep 30, 2022
Derivatives designated as hedging instruments:
Fair value hedges:
Excluded components 3, 4
$(88)$— $(93)$— $— $— $— $— 
Cash flow hedges:
Interest rate contracts 4
— 24 5 231 (3)(3)(7)(8)
Foreign currency contracts 5
5 2 6 8 — 4 1 10 
Commodity contracts 5
4 23 (145)310 (42)79 (203)220 
Net foreign investment hedges:
Foreign currency contracts69 88 72 135 — — — — 
Excluded components 3, 6
4 25 35 59 19 15 26 38 
Total derivatives designated as hedging instruments$(6)$162 $(120)$743 $(26)$95 $(183)$260 
Derivatives not designated as hedging instruments:
Interest rate contracts 4
$— $— $— $— $— $— $1 $(1)
Foreign currency contracts 6
— — — — (101)(255)(95)(531)
Commodity contracts 5
— — — — (1)10 3 39 
Total return swap 5
— — — — (16)— (13)— 
Total derivatives not designated as hedging instruments$— $— $— $— $(118)$(245)$(104)$(493)
Total derivatives$(6)$162 $(120)$743 $(144)$(150)$(287)$(233)
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.
4.Included in "Interest expense and amortization of debt discount" in the consolidated statements of income.
5.Included in "Cost of sales" in the consolidated statements of income.
6.Included in "Sundry income (expense) - net" in the consolidated statements of income.

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

Expected Reclassifications from AOCL within the next 12 monthsSep 30, 2023
In millions
Cash flow hedges:
Interest rate contracts$(7)
Commodity contracts$(33)
Foreign currency contracts$5 
Net foreign investment hedges:
Excluded components$4