Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2011

Derivative Financial Instruments

Fair Value of Derivative Instruments in the Consolidated Statement of Financial Position

	Fair Value of Derivative Assets					Fair Value of Derivative Liabilities
	Balance Sheet					Balance Sheet
(Dollars in millions)	Classification	6/30/2011		12/31/2010		Classification	6/30/2011		12/31/2010
Designated as hedging instruments:
Interest rate contracts:	Prepaid expenses and other current assets	$	28	$	33	Other accrued expenses and liabilities	$	—	$	—
	Investments and sundry assets	508		514		Other liabilities	—		—
Foreign exchange contracts:	Prepaid expenses and other current assets	118		224		Other accrued expenses and liabilities	701		498
	Investments and sundry assets	25		22		Other liabilities	74		135
Fair value of derivative assets		$	678	$	794	Fair value of derivative liabilities	$	775	$	633
Not designated as hedging instruments:
Foreign exchange contracts:	Prepaid expenses and other current assets	$	63	$	242	Other accrued expenses and liabilities	$	122	$	370
	Investments and sundry assets	39		51		Other liabilities	—		—
Equity contracts:	Prepaid expenses and other current assets	22		12		Other accrued expenses and liabilities	1		3
Fair value of derivative assets		$	125	$	305	Fair value of derivative liabilities	$	123	$	373
Total debt designated as hedging instruments:
Short-term debt		N/A		N/A			$	879	$	823
Long-term debt		N/A		N/A			1,957		1,746
Total		$	803	$	1,099		$	3,733	$	3,576

N/A—not applicable

Effect of Derivative Instruments in the Consolidated Statement of Earnings

	Gain (Loss) Recognized in Earnings
	Consolidated
	Statement of	Recognized on					Attributable to Risk
(Dollars in millions)	Earnings Line Item	Derivatives(1)					Being Hedged(2)
For the three months ended June 30:		2011		2010			2011			2010
Derivative instruments in fair value hedges:
Interest rate contracts	Cost of financing	$	68	$	185		$	(27	)	$	(142	)
	Interest expense	48		109			(19		)	(84		)
Derivative instruments not designated as hedging instruments:(1)
Foreign exchange contracts	Other (income) and expense	117		(177		)	N/A			N/A
Equity contracts	SG&A expense	13		(63		)	N/A			N/A
Total		$	246	$	54		$	(46	)	$	(226	)

	Gain (Loss) Recognized in Earnings and Other Comprehensive Income
						Consolidated							(Ineffectiveness) and
	Effective Portion					Statement of	Effective Portion Reclassified						Amounts Excluded from
	Recognized in AOCI					Earnings Line Item	from AOCI to Earnings						Effectiveness Testing(3)
For the three months ended June 30:	2011			2010			2011			2010			2011			2010
Derivative instruments in cash flow hedges:
Interest rate contracts	$	—		$	—	Interest expense	$	(2	)	$	(2	)	$	—		$	—
Foreign exchange contracts	(217		)	760		Other (income) and expense	(123		)	40			(1		)	(1		)
						Cost of sales	(69		)	6			—			—
						SG&A expense	(33		)	6			—			—
Instruments in net investment hedges(4):
Foreign exchange contracts	(102		)	340		Interest expense	0			0			(4		)	(1		)
Total	$	(319	)	$	1,100		$	(227	)	$	50		$	(5	)	$	(2	)

Note: AOCI represents Accumulated other comprehensive income/(loss) in the Consolidated Statement of Changes in Equity.

(1)	The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts.
(2)	The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period.
(3)	The amount of gain (loss) recognized in income represents ineffectiveness on hedge relationships.
(4)	Instruments in net investment hedges include derivative and non-derivative instruments.

	Gain (Loss) Recognized in Earnings
	Consolidated
	Statement of	Recognized on					Attributable to Risk
(Dollars in millions)	Earnings Line Item	Derivatives(1)					Being Hedged(2)
For the six months ended June 30:		2011		2010			2011		2010
Derivative instruments in fair value hedges:
Interest rate contracts	Cost of financing	$	60	$	256		$	24	$	(166	)
	Interest expense	41		150			16		(98		)
Derivative instruments not designated as hedging instruments:(1)
Foreign exchange contracts	Other (income) and expense	205		(305		)	N/A		N/A
Equity contracts	SG&A expense	72		(42		)	N/A		N/A
Total		$	378	$	59		$	40	$	(264	)

	Gain (Loss) Recognized in Earnings and Other Comprehensive Income
						Consolidated							(Ineffectiveness) and
	Effective Portion					Statement of	Effective Portion Reclassified						Amounts Excluded from
	Recognized in AOCI					Earnings Line Item	from AOCI to Earnings						Effectiveness Testing(3)
For the six months ended June 30:	2011			2010			2011			2010			2011			2010
Derivative instruments in cash flow hedges:
Interest rate contracts	$	—		$	—	Interest expense	$	(4	)	$	(4	)	$	—		$	—
Foreign exchange contracts	(454		)	1,390		Other (income) and expense	(170		)	(14		)	0			(7		)
						Cost of sales	(103		)	(83		)	—			—
						SG&A expense	(51		)	(45		)	—			—
Instruments in net investment hedges(4):
Foreign exchange contracts	(252		)	587		Interest expense	—			0			(5		)	(1		)
Total	$	(706	)	$	1,977		$	(328	)	$	(146	)	$	(5	)	$	(8	)

Note: AOCI represents Accumulated other comprehensive income/(loss) in the Consolidated Statement of Changes in Equity.

(1)	The amount includes changes in clean fair values of the derivative instruments in fair value hedging relationships and the periodic accrual for coupon payments required under these derivative contracts.
(2)	The amount includes basis adjustments to the carrying value of the hedged item recorded during the period and amortization of basis adjustments recorded on de-designated hedging relationships during the period.
(3)	The amount of gain (loss) recognized in income represents ineffectiveness on hedge relationships.
(4)	Instruments in net investment hedges include derivative and non-derivative instruments.