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Derivative Financial Instruments and Hedging Activities (Notes)
 6 Months Ended
Jun. 30, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
In the normal course of business, our operations are exposed to global market risks, including the effect of changes in foreign currency exchange rates, certain commodity prices, and interest rates. To manage these risks, we enter into highly effective derivative contracts. We have elected to apply hedge accounting to certain derivatives. Derivatives that are designated in hedging relationships are evaluated for effectiveness using regression analysis at the time they are designated and throughout the hedge period. Some derivatives do not qualify for hedge accounting; for others, we elect not to apply hedge accounting.

Income Effect of Derivative Financial Instruments

The gains/(losses), by hedge designation, reported in income for the periods ended June 30 were as follows (in millions):
 Second QuarterFirst Half
Cash flow hedges
2023202420232024
Reclassified from AOCI to Cost of sales
Foreign currency exchange contracts (a)
$64 $50 $90 $64 
Commodity contracts (b)
(15)(3)(24)(29)
Fair value hedges
Interest rate contracts
Net interest settlements and accruals on hedging instruments
(130)(106)(270)(202)
Fair value changes on hedging instruments(316)(26)(66)(269)
Fair value changes on hedged debt292 17 13 237 
Cross-currency interest rate swap contracts
Net interest settlements and accruals on hedging instruments
(19)(35)(33)(64)
Fair value changes on hedging instruments(24)(47)(2)(111)
Fair value changes on hedged debt22 40 3 102 
Derivatives not designated as hedging instruments
Foreign currency exchange contracts (c)25 126 22 195 
Cross-currency interest rate swap contracts
(60)(30)25 (196)
Interest rate contracts109 3 97 51 
Commodity contracts(45)9 (56)(11)
Total$(97)$(2)$(201)$(233)
__________
(a)For the second quarter and first half of 2023, a $328 million loss and a $391 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax. For the second quarter and first half of 2024, a $49 million gain and a $337 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax.
(b)For the second quarter and first half of 2023, a $108 million loss and a $100 million loss, respectively, were reported in Other comprehensive income/(loss), net of tax. For the second quarter and first half of 2024, a $54 million gain and a $22 million gain, respectively, were reported in Other comprehensive income/(loss), net of tax.
(c)For the second quarter and first half of 2023, a $32 million gain and a $51 million gain, respectively, were reported in Cost of sales, and a $7 million loss and a $29 million loss, respectively, were reported in Other income/(loss), net. For the second quarter and first half of 2024, an $81 million gain and a $58 million gain, respectively, were reported in Cost of sales, and a $45 million gain and a $137 million gain, respectively, were reported in Other income/(loss), net.
NOTE 13. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Continued)

Balance Sheet Effect of Derivative Financial Instruments

Derivative assets and liabilities are reported on our consolidated balance sheets at fair value and are presented on a gross basis. The notional amounts of the derivative instruments do not necessarily represent amounts exchanged by the parties and are not a direct measure of our financial exposure. We also enter into master agreements with counterparties that may allow for netting of exposures in the event of default or breach of the counterparty agreement. Collateral represents cash received or paid under reciprocal arrangements that we have entered into with our derivative counterparties, which we do not use to offset our derivative assets and liabilities.

The fair value of our derivative instruments and the associated notional amounts were as follows (in millions):
December 31, 2023June 30, 2024
NotionalFair Value of
Assets		Fair Value of
Liabilities		NotionalFair Value of
Assets		Fair Value of
Liabilities
Cash flow hedges   
Foreign currency exchange contracts
$19,530 $69 $385 $19,610 $117 $160 
Commodity contracts983 23 36 988 44 12 
Fair value hedges
Interest rate contracts12,119 106 633 17,311 81 807 
Cross-currency interest rate swap contracts
2,078 69 104 3,802 16 139 
Derivatives not designated as hedging instruments
Foreign currency exchange contracts22,802 201 261 22,295 266 96 
Cross-currency interest rate swap contracts
7,100 119 252 5,301 82 234 
Interest rate contracts73,134 465 1,036 72,746 397 860 
Commodity contracts1,051 35 31 955 51 29 
Total derivative financial instruments, gross (a) (b)
$138,797 $1,087 $2,738 $143,008 $1,054 $2,337 
Current portion
$493 $1,464 $718 $1,392 
Non-current portion
594 1,274 336 945 
Total derivative financial instruments, gross
$1,087 $2,738 $1,054 $2,337 
__________
(a)At December 31, 2023 and June 30, 2024, we held collateral of $40 million and $22 million, respectively, and we posted collateral of $185 million and $119 million, respectively.
(b)At December 31, 2023 and June 30, 2024, the fair value of assets and liabilities available for counterparty netting was $815 million and $603 million, respectively. All derivatives are categorized within Level 2 of the fair value hierarchy.