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Financial Instruments (Tables)

12 Months Ended

Dec. 31, 2015

Financial assets and financial liabilities measured at fair value on a recurring basis

($ in millions)

At December 31, 2015:				Level 1		Level 2		Level 3		Total
Assets
	Cash equivalents(1)
		Time deposits and certificates of deposit	$	—	$	2,856	$	—	$	2,856
		Money market funds		2,069		—		—		2,069
		Other securities		—		18		—		18
	Total			2,069		2,874		—		4,943	(6)
	Debt securities — current (2)			—		506		—		506	(6)
	Debt securities — noncurrent (3)			1		6		—		8
	Trading security investments (3)			28		—		—		28
	Available-for-sale equity investments (3)			192		—		—		192
	Derivative assets (4)
		Interest rate contracts		—		656		—		656
		Foreign exchange contracts		—		332		—		332
		Equity contracts		—		6		—		6
	Total			—		994		—		994	(7)
Total assets			$	2,290	$	4,381	$	—	$	6,671	(7)
Liabilities
	Derivative liabilities (5)
		Foreign exchange contracts	$	—	$	164	$	—	$	164
		Equity contracts		—		19		—		19
		Interest rate contracts		—		3		—		3
Total liabilities			$	—	$	186	$	—	$	186	(7)

(1) Included within cash and cash equivalents in the Consolidated Statement of Financial Position.

(2) Commercial paper and certificates of deposit reported as marketable securities in the Consolidated Statement of Financial Position.

(3) Included within investments and sundry assets in the Consolidated Statement of Financial Position.

(4) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments

and sundry assets in the Consolidated Statement of Financial Position at December 31, 2015 were $292 million

and $702 million, respectively.

(5) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other liabilities in the Consolidated Statement of Financial Position at December 31, 2015 were $164 million and $22 million, respectively.

(6) Available-for-sale securities with carrying values that approximate fair value.

(7) If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated

Statement of Financial Position, the total derivative asset and liability positions would have been reduced by $139

million each.

($ in millions)

At December 31, 2014:				Level 1		Level 2		Level 3		Total
Assets
	Cash equivalents(1)
		Time deposits and certificates of deposit	$	—	$	3,517	$	—	$	3,517
		Commercial paper		—		764		—		764
		Money market funds		662		—		—		662
		U.S. government securities		—		410		—		410
		Other securities		—		6		—		6
	Total			662		4,697		—		5,359	(5)
	Debt securities — noncurrent (2)			1		8		—		9
	Trading security investments (2)			74		—		—		74
	Available-for-sale equity investments (2)			243		—		—		243
	Derivative assets (3)
		Interest rate contracts		—		633		—		633
		Foreign exchange contracts		—		775		—		775
		Equity contracts		—		24		—		24
	Total			—		1,432		—		1,432	(6)
Total assets			$	980	$	6,138	$	—	$	7,118	(6)
Liabilities
	Derivative liabilities (4)
		Foreign exchange contracts	$	—	$	177	$	—	$	177
		Equity contracts		—		19		—		19
Total liabilities			$	—	$	196	$	—	$	196	(6)

(1) Included within cash and cash equivalents in the Consolidated Statement of Financial Position.

(2) Included within investments and sundry assets in the Consolidated Statement of Financial Position.

(3) The gross balances of derivative assets contained within prepaid expenses and other current assets, and investments

and sundry assets in the Consolidated Statement of Financial Position at December 31, 2014 were $751 million and

$681 million, respectively.

(4) The gross balances of derivative liabilities contained within other accrued expenses and liabilities, and other

liabilities in the Consolidated Statement of Financial Position at December 31, 2014 were $165 million and $31

million, respectively.

(5) Available-for-sale securities with carrying values that approximate fair value.

(6) If derivative exposures covered by a qualifying master netting agreement had been netted in the Consolidated

Statement of Financial Position, the total derivative asset and liability positions would have been reduced by $97

million each.

Noncurrent debt and marketable equity securities available-for-sale and recorded at fair value

($ in millions)

			Gross		Gross
	Adjusted		Unrealized		Unrealized		Fair
At December 31, 2015:	Cost		Gains		Losses		Value
Debt securities – noncurrent(1)	$	5	$	3	$	—	$	8
Available-for-sale equity investments(1)	$	186	$	6	$	0	$	192

(1) Included within investments and sundry assets in the Consolidated Statement of Financial Position.

($ in millions)

			Gross		Gross
	Adjusted		Unrealized		Unrealized		Fair
At December 31, 2014:	Cost		Gains		Losses		Value
Debt securities – noncurrent(1)	$	7	$	3	$	—	$	9
Available-for-sale equity investments(1)	$	272	$	2	$	31	$	243

(1) Included within investments and sundry assets in the Consolidated Statement of Financial Position.

Sales of debt and available-for-sale equity investments

($ in millions)

For the year ended December 31:		2015		2014		2013
Proceeds	$	8	$	21	$	41
Gross realized gains (before taxes)		1		0		13
Gross realized losses (before taxes)		1		5		5

Unrealized gains/(losses) on available-for-sale debt and equity securities

($ in millions)

For the year ended December 31:		2015		2014
Net unrealized gains/(losses) arising during the period		$	(33)	$	(18)
Net unrealized (gains)/losses reclassified to net income *			53		3

*	Includes pre-tax writedowns of $86 million in 2015. There were no writedowns in 2014.

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

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

($ in millions)

	Fair Value of Derivative Assets							Fair Value of Derivative Liabilities
			Balance Sheet						Balance Sheet
At December 31:			Classification	2015		2014			Classification	2015		2014
Designated as hedging
instruments
Interest rate contracts		Prepaid expenses and						Other accrued
			other current assets	$	—	$	5		expenses and liabilities	$	—	$	0
		Investments and sundry
			assets		656		628	Other liabilities			3		—
Foreign exchange		Prepaid expenses and						Other accrued
contracts			other current assets		197		632		expenses and liabilities		70		50
		Investments and sundry
			assets		5		17	Other liabilities			19		21
		Fair value of derivative						Fair value of derivative
			assets	$	858	$	1,281		liabilities	$	92	$	72
Not designated as
hedging instruments
Foreign exchange		Prepaid expenses and						Other accrued
contracts			other current assets	$	90	$	90		expenses and liabilities	$	75	$	101
		Investments and sundry
			assets		40		37	Other liabilities			—		4
Equity contracts		Prepaid expenses and						Other accrued
			other current assets		6		24		expenses and liabilities		19		14
		Investments and sundry
			assets		—		0	Other liabilities			—		5
		Fair value of derivative						Fair value of derivative
			assets	$	136	$	151		liabilities	$	94	$	125

Total debt designated as
hedging instruments
Short-term debt					N/A		N/A			$	—	$	0
Long-term debt					N/A		N/A			$	7,945	$	7,747	*
Total				$	994	$	1,432			$	8,131	$	7,944	*

* Reclassified to reflect adoption of the FASB guidance on debt issuance costs in consolidated financial statements. Refer to Note B, "Accounting Changes,"
for additional information.
N/A-not applicable

Effect of Derivative Instruments in the Consolidated Statement of Earnings


The Effect of Derivative Instruments in the Consolidated Statement of Earnings

($ in millions)

		Gain/(Loss) Recognized in Earnings
		Consolidated
		Statement of
		Earnings	Recognized on						Attributable to Risk
		Line Item	Derivatives(1)						Being Hedged(2)
For the year ended December 31:				2015		2014		2013		2015		2014		2013
Derivative instruments
in fair value hedges(5)
	Interest rate contracts	Cost of financing	$	108	$	231	$	(109)	$	(1)	$	(127)	$	202
		Interest expense		94		206		(74)		(1)		(114)		138
Derivative instruments not
designated as hedging instruments(1)
	Foreign exchange contracts	Other (income)
		and expense		127		(776)		(328)		N/A		N/A		N/A
	Interest rate contracts	Other (income)
		and expense		(1)		34		—		N/A		N/A		N/A
	Equity contracts	SG&A expense		(27)		51		164		N/A		N/A		N/A
		Other (income)
		and expense		(9)		(9)		—		N/A		N/A		N/A

Total			$	291	$	(263)	$	(347)	$	(1)	$	(241)	$	340


($ in millions)

			Gain/(Loss) Recognized in Earnings and Other Comprehensive Income
										Consolidated
										Statement of							Ineffectiveness and
			Effective Portion							Earnings	Effective Portion						Amounts Excluded from
For the year			Recognized in OCI							Line Item	Reclassified from AOCI						Effectiveness Testing(3)
		ended December 31:	2015		2014		2013				2015		2014		2013		2015		2014		2013
Derivative instruments
	in cash flow hedges
		Interest rate contracts	$	—	$	—	$	—	Interest expense		$	0	$	(1)	$	—	$	—	$	—	$	—

		Foreign exchange							Other (income)
		contracts		618		958		43		and expense		731		98		162		5		(1)		0
									Cost of sales			192		(15)		(34)		—		—		—
									SG&A expense			149		15		39		—		—		—
Instruments in net
	investment hedges(4)
		Foreign exchange
		contracts		889		1,136		173	Interest expense			—		—		—		13		0		3

Total			$	1,507	$	2,095	$	216			$	1,072	$	97	$	167	$	18	$	(1)	$	3

(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.

(5) For the years ended December 31, 2015 and December 31, 2014, fair value hedges resulted in a loss of $2 million and a gain of $ 4 million in ineffectiveness, respectively. There were no amounts recorded as ineffectiveness on fair value hedges for the year ended December 31, 2013.

N/A—Not applicable

- Definition

Tabular disclosure of available-for-sale securities which includes, but is not limited to, changes in the cost basis and fair value, fair value and gross unrealized gain (loss), fair values by type of security, contractual maturity and classification, amortized cost basis, contracts to acquire securities to be accounted for as available-for-sale, debt maturities, transfers to trading, change in net unrealized holding gain (loss) net of tax, continuous unrealized loss position fair value, aggregate losses qualitative disclosures, other than temporary impairment (OTTI) losses or other disclosures related to available for sale securities.

+ References + Details

- Definition

Tabular disclosure of the realized and unrealized gains and losses reported in the statement of income which have resulted from the sale and holding of marketable securities, respectively, as well as the sale or disposal of cost method investments. Such amounts would include realized gains and losses on the sale or disposal of trading, available-for-sale, and held-to-maturity securities, unrealized gains and losses on trading securities, unrealized gains and losses on available-for-sale and held-to-maturity securities transferred to the trading securities category, realized gains and losses on the sale or disposal of cost method investments, and losses recognized for other than temporary impairments (OTTI) of such investments.

+ References + Details