Derivative Instruments and Fair Value Measurements (Tables)

6 Months Ended

Jul. 01, 2017

Jul. 02, 2016

Derivative Instruments and Fair Value Measurements [Abstract]

Fair Value Measurements, Nonrecurring [Table Text Block]

The following table presents level 3 assets that were measured at fair value on the consolidated Balance Sheet on a nonrecurring basis as of July 2, 2016:

(millions)	Fair Value		Total Loss
Description:
Long-lived assets	$	10	$	(16	)
Total	$	10	$	(16	)

Schedule of Total Notional Amounts of Derivative Instruments

(millions)	July 1, 2017		December 31, 2016
Foreign currency exchange contracts	$	2,253	$	1,396
Interest rate contracts	2,197		2,185
Commodity contracts	423		437
Total	$	4,873	$	4,018

Schedule of Assets and Liabilities Measured at Fair Value on a Recurring Basis

Derivatives designated as hedging instruments

	July 1, 2017								December 31, 2016
(millions)	Level 1		Level 2			Total			Level 1		Level 2			Total
Assets:
Foreign currency exchange contracts:
Other prepaid assets	$	—	$	—		$	—		$	—	$	2		$	2
Interest rate contracts:
Other assets (a)	—		—			—			—		1			1
Total assets	$	—	$	—		$	—		$	—	$	3		$	3
Liabilities:
Interest rate contracts:
Other liabilities (a)	—		(46		)	(46		)	—		(65		)	(65		)
Total liabilities	$	—	$	(46	)	$	(46	)	$	—	$	(65	)	$	(65	)

(a) The fair value of the related hedged portion of the Company's long-term debt, a level 2 liability, was $2.2 billion and $2.2 billion as of July 1, 2017 and December 31, 2016, respectively.

Derivatives not designated as hedging instruments

	July 1, 2017									December 31, 2016
(millions)	Level 1			Level 2			Total			Level 1			Level 2			Total
Assets:
Foreign currency exchange contracts:
Other prepaid assets	$	—		$	16		$	16		$	—		$	25		$	25
Commodity contracts:
Other prepaid assets	13			—			13			13			—			13
Total assets	$	13		$	16		$	29		$	13		$	25		$	38
Liabilities:
Foreign currency exchange contracts:
Other current liabilities	$	—		$	(21	)	$	(21	)	$	—		$	(11	)	$	(11	)
Commodity contracts:
Other current liabilities	(5		)	—			(5		)	$	(7	)	$	—		$	(7	)
Total liabilities	$	(5	)	$	(21	)	$	(26	)	$	(7	)	$	(11	)	$	(18	)

Schedule of Offsetting Assets

As of July 1, 2017:
				Gross Amounts Not Offset in the Consolidated Balance Sheet
	Amounts Presented in the Consolidated Balance Sheet			Financial Instruments			Cash Collateral Received/ Posted		Net Amount
Total asset derivatives	$	29		$	(18	)	$	—	$	11
Total liability derivatives	$	(72	)	$	18		$	18	$	(36	)

As of December 31, 2016:
				Gross Amounts Not Offset in the Consolidated Balance Sheet
	Amounts Presented in the Consolidated Balance Sheet			Financial Instruments			Cash Collateral Received/ Posted		Net Amount
Total asset derivatives	$	41		$	(24	)	$	—	$	17
Total liability derivatives	$	(83	)	$	24		$	48	$	(11	)

Schedule of Offsetting Liabilities

As of July 1, 2017:
				Gross Amounts Not Offset in the Consolidated Balance Sheet
	Amounts Presented in the Consolidated Balance Sheet			Financial Instruments			Cash Collateral Received/ Posted		Net Amount
Total asset derivatives	$	29		$	(18	)	$	—	$	11
Total liability derivatives	$	(72	)	$	18		$	18	$	(36	)

As of December 31, 2016:
				Gross Amounts Not Offset in the Consolidated Balance Sheet
	Amounts Presented in the Consolidated Balance Sheet			Financial Instruments			Cash Collateral Received/ Posted		Net Amount
Total asset derivatives	$	41		$	(24	)	$	—	$	17
Total liability derivatives	$	(83	)	$	24		$	48	$	(11	)

Schedule of the Effect of Derivative Instruments on the Consolidated Statements of Income and Comprehensive Income

The effect of derivative instruments on the Consolidated Statements of Income and Comprehensive Income for the quarters ended July 1, 2017 and July 2, 2016 was as follows:

Derivatives in fair value hedging relationships

(millions)	Location of gain (loss) recognized in income	Gain (loss) recognized in income (a)
		July 1, 2017		July 2, 2016
Interest rate contracts	Interest expense	$	5	$	3
Total		$	5	$	3

(a) Includes the ineffective portion and amount excluded from effectiveness testing.

Derivatives in cash flow hedging relationships

(millions)	Gain (loss) recognized in AOCI					Location of gain (loss) reclassified from AOCI	Gain (loss) reclassified from AOCI into income						Location of gain (loss) recognized in income (a)	Gain (loss) recognized in income (a)
	July 1, 2017		July 2, 2016				July 1, 2017			July 2, 2016				July 1, 2017		July 2, 2016
Foreign currency  exchange contracts	$	—	$	(1	)	COGS	$	—		$	—		Other income (expense), net	$	—	$	(1	)
Interest rate contracts	1		(3		)	Interest  expense	(3		)	(2		)	N/A	—		—
Commodity contracts	—		1			COGS	—			(4		)	Other income (expense), net	—		—
Total	$	1	$	(3	)		$	(3	)	$	(6	)		$	—	$	(1	)

(a) Includes the ineffective portion and amount excluded from effectiveness testing.

Derivatives and non-derivatives in net investment hedging relationships

(millions)	Gain (loss) recognized in AOCI
	July 1, 2017			July 2, 2016
Foreign currency denominated long-term debt	$	(157	)	$	46
Foreign currency exchange contracts	—			(1		)
Total	$	(157	)	$	45

Derivatives not designated as hedging instruments

(millions)	Location of gain (loss) recognized in income	Gain (loss) recognized in income
		July 1, 2017			July 2, 2016
Foreign currency exchange contracts	COGS	$	(4	)	$	(1	)
Foreign currency exchange contracts	Other income (expense), net	(3		)	(1		)
Foreign currency exchange contracts	SG&A	(1		)	—
Commodity contracts	COGS	10			6
Commodity contracts	SG&A	—			2
Total		$	2		$	6

The effect of derivative instruments on the Consolidated Statements of Income and Comprehensive Income for the year-to-date periods ended July 1, 2017 and July 2, 2016 was as follows:

Derivatives in fair value hedging relationships

(millions)	Location of gain (loss) recognized in income	Gain (loss) recognized in income (a)
		July 1, 2017		July 2, 2016
Foreign currency exchange contracts	Other income (expense), net	$	—	$	—
Interest rate contracts	Interest expense	10		9
Total		$	10	$	9

Derivatives in cash flow hedging relationships

(millions)	Gain (loss) recognized in AOCI					Location of gain (loss) reclassified from AOCI	Gain (loss) reclassified from AOCI into income						Location of gain (loss) recognized in income (a)	Gain (loss) recognized in income (a)
	July 1, 2017		July 2, 2016				July 1, 2017			July 2, 2016				July 1, 2017		July 2, 2016
Foreign currency  exchange contracts	$	—	$	9		COGS	$	1		$	7		Other income (expense), net	$	—	$	(1	)
Foreign currency exchange contracts	—		—			SGA  expense	—			—			Other income (expense), net	—		—
Interest rate contracts	1		(69		)	Interest expense	(5		)	(8		)	N/A	—		—
Commodity contracts	—		—			COGS	—			(7		)	Other income (expense), net	—		—
Total	$	1	$	(60	)		$	(4	)	$	(8	)		$	—	$	(1	)

(a) Includes the ineffective portion and amount excluded from effectiveness testing.

Derivatives and non-derivatives in net investment hedging relationships

(millions)	Gain (loss) recognized in AOCI
	July 1, 2017			July 2, 2016
Foreign currency denominated long-term debt	$	(182	)	$	(12	)
Foreign currency exchange contracts	—			(23		)
Total	$	(182	)	$	(35	)

Derivatives not designated as hedging instruments

(millions)	Location of gain (loss) recognized in income	Gain (loss) recognized in income
		July 1, 2017			July 2, 2016
Foreign currency exchange contracts	COGS	$	(13	)	$	(10	)
Foreign currency exchange contracts	Other income (expense), net	(8		)	10
Foreign currency exchange contracts	SGA	(1		)	—
Interest rate contracts	Interest expense	—			—
Commodity contracts	COGS	(3		)	10
Commodity contracts	SGA	1			2
Total		$	(24	)	$	12