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Derivative Instruments and Fair Value Measurements (Tables)
3 Months Ended
Mar. 28, 2020
Derivative Instruments and Fair Value Measurements [Abstract]  
Schedule of Total Notional Amounts of Derivative Instruments
Total notional amounts of the Company’s derivative instruments as of March 28, 2020 and December 28, 2019 were as follows:
(millions)
March 28,
2020
December 28,
2019
Foreign currency exchange contracts
$
3,374

$
2,628

Cross-currency contracts
1,529

1,540

Interest rate contracts
2,143

1,871

Commodity contracts
527

524

Total
$
7,573

$
6,563


Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]
The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of March 28, 2020 and December 28, 2019:
Derivatives designated as hedging instruments
 
March 28, 2020
 
December 28, 2019
(millions)
Level 1
Level 2
Total
 
Level 1
Level 2
Total
Assets:
 
 
 
 
 
 
 
Cross-currency contracts:
 
 
 
 
 
 
 
Other current assets
$

$
75

$
75

 
$

$
45

$
45

Other assets

73

73

 

40

40

Interest rate contracts:
 
 

 
 
 

Other current assets



 

7

7

Other assets (a)

6

6

 

4

4

Total assets
$

$
154

$
154


$

$
96

$
96

Liabilities:
 
 

 
 
 

Interest rate contracts:
 
 

 
 
 

Other current liabilities
$

$
(58
)
$
(58
)
 
$

$
(4
)
$
(4
)
Other liabilities

(5
)
(5
)
 



Total liabilities
$

$
(63
)
$
(63
)

$

$
(4
)
$
(4
)

(a) The fair value of the related hedged portion of the Company's long-term debt, a level 2 liability, was $0.7 billion as of March 28, 2020 and December 28, 2019.
Derivatives not designated as hedging instruments
 
March 28, 2020
 
December 28, 2019
(millions)
Level 1
Level 2
Total
 
Level 1
Level 2
Total
Assets:
 
 
 
 
 
 
 
Foreign currency exchange contracts:
 
 
 
 
 
 
 
Other current assets
$

$
74

$
74

 
$

$
12

$
12

  Other assets

7

7

 



Commodity contracts:
 
 
 
 
 
 
 
Other current assets
5


5

 
9


9

Total assets
$
5

$
81

$
86


$
9

$
12

$
21

Liabilities:
 
 
 
 
 
 
 
Foreign currency exchange contracts:
 
 
 
 
 
 
 
Other current liabilities
$

$
(34
)
$
(34
)
 
$

$
(18
)
$
(18
)
Other liabilities

(1
)
(1
)
 



Interest rate contracts:
 
 
 
 
 
 
 
Other liabilities

(13
)
(13
)
 

(13
)
(13
)
Commodity contracts:
 
 
 
 
 
 
 
Other current liabilities
(7
)

(7
)
 
(1
)

(1
)
Total liabilities
$
(7
)
$
(48
)
$
(55
)

$
(1
)
$
(31
)
$
(32
)

Schedule of Derivative Instruments in Statement of Financial Position Fair Value
The following amounts were recorded on the Consolidated Balance Sheet related to cumulative basis adjustments for existing fair value hedges as of March 28, 2020 and December 28, 2019.
(millions)
 
Line Item in the Consolidated Balance Sheet in which the hedged item is included
 
Carrying amount of the hedged liabilities
 
Cumulative amount of fair value hedging adjustment included in the carrying amount of the hedged liabilities (a)
 
 
 
 
March 28,
2020
December 28,
2019
 
March 28,
2020
December 28,
2019
Interest rate contracts
 
Current maturities of long-term debt
 
$
493

$
493

 
$

$

Interest rate contracts
 
Long-term debt
 
$
2,790

$
2,643

 
$
20

$
19

(a) The hedged long-term debt includes $15 million of hedging adjustment on discontinued hedging relationships as of March 28, 2020 and December 28, 2019.
Schedule of Offsetting Assets
 
 
 
 
As of March 28, 2020:
  
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
$
240

$
(91
)
$
(77
)
$
72

Total liability derivatives
$
(118
)
$
91

$

$
(27
)

 
 
 
 
 
As of December 28, 2019:
  
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
$
117

$
(27
)
$
(7
)
$
83

Total liability derivatives
$
(36
)
$
27

$

$
(9
)

Schedule of Offsetting Liabilities
 
 
 
 
As of March 28, 2020:
  
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
$
240

$
(91
)
$
(77
)
$
72

Total liability derivatives
$
(118
)
$
91

$

$
(27
)

 
 
 
 
 
As of December 28, 2019:
  
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
$
117

$
(27
)
$
(7
)
$
83

Total liability derivatives
$
(36
)
$
27

$

$
(9
)

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 March 28, 2020 and March 30, 2019 was as follows:
Derivatives and non-derivatives in net investment hedging relationships
(millions)
Gain (loss)
recognized in
AOCI
 
Gain (loss) excluded from assessment of hedge effectiveness
Location of gain (loss) in income of excluded component
 
March 28,
2020
 
March 30,
2019
 
March 28,
2020
 
March 30,
2019
 
Foreign currency denominated long-term debt
$
9

 
$
51

 
$

 
$

 
Cross-currency contracts
66

 
(8
)
 
9

 
8

Interest expense
Total
$
75

 
$
43

 
$
9

 
$
8

 
Derivatives not designated as hedging instruments
(millions)
Location of gain
(loss) recognized
in income
Gain (loss)
recognized in
income
 
 
March 28,
2020
 
March 30,
2019
Foreign currency exchange contracts
COGS
$
51

 
$
(11
)
Foreign currency exchange contracts
Other income (expense), net
9

 
(1
)
Foreign currency exchange contracts
SG&A
4

 

Commodity contracts
COGS
(24
)
 
(32
)
Total
 
$
40


$
(44
)
 
 
 
 
 
 
 
 
 

 
 
 
 
 

The effect of fair value and cash flow hedge accounting on the Consolidated Income Statement for the quarters ended March 28, 2020 and March 30, 2019:
 
 
 
 
March 28, 2020
 
March 30, 2019
(millions)
 
Interest Expense
 
Interest Expense
Total amounts of income and expense line items presented in the Consolidated Income Statement in which the effects of fair value or cash flow hedges are recorded
 
$
64

 
$
74

 
Gain (loss) on fair value hedging relationships:
 
 
 
 
 
Interest contracts:
 
 
 
 
 
Hedged items
 
(1
)
 
(24
)
 
Derivatives designated as hedging instruments
 
2

 
24

 
 
 
 
 
 
 
 
Gain (loss) on cash flow hedging relationships:
 
 
 
 
 
Interest contracts:
 
 
 
 
 
Amount of gain (loss) reclassified from AOCI into income
 
(2
)
 
(1
)
 
 
 
 
 
 
 

Available-for-sale securities
The following is a summary of the carrying and market values of the Company's available for sale securities:
 
March 28, 2020
 
December 28, 2019
 
 
Unrealized
 
 
 
Unrealized
 
(millions)
Cost
Gain (Loss)
Market Value
 
Cost
Gain (Loss)
Market Value
Corporate bonds
$
60

$
(3
)
$
57

 
$

$

$