Derivative Instruments and Fair Value Measurements (Tables)

12 Months Ended

Jan. 02, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Total Notional Amounts of the Company's Derivative Instruments

(millions)	2020		2019
Foreign currency exchange contracts	$	2,856	$	2,628
Cross-currency contracts	1,411		1,540
Interest rate contracts	2,632		1,871
Commodity contracts	314		524
Total	$	7,213	$	6,563

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis

The following table presents assets and liabilities that were measured at fair value in the Consolidated Balance Sheet on a recurring basis as of January 2, 2021 and December 28, 2019:

Derivatives designated as hedging instruments

	2020						2019
(millions)	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Cross currency contracts:
Other current assets	$	—	$	14	$	14	$	—	$	45	$	45
Other Assets	—		16		16		—		40		40
Interest rate contracts (a):
Other current assets	—		—		—		—		7		7
Other assets	—		60		60		—		4		4
Total assets	$	—	$	90	$	90	$	—	$	96	$	96
Liabilities:
Cross currency contracts:
Other current liabilities	$	—	$	(13)	$	(13)	$	—	$	—	$	—
Other liabilities	—		(21)		(21)		—		—		—
Interest rate contracts (a):
Other current liabilities	—		(3)		(3)		—		(4)		(4)
Other liabilities	—		—		—		—		—		—
Total liabilities	$	—	$	(37)	$	(37)	$	—	$	(4)	$	(4)

(a)The fair value of the related hedged portion of the Company’s long-term debt, a level 2 liability, was $0.8 billion and $0.7 billion as of January 2, 2021 and December 28, 2019, respectively.

Derivatives not designated as hedging instruments

	2020						2019
(millions)	Level 1		Level 2		Total		Level 1		Level 2		Total
Assets:
Foreign currency exchange contracts:
Other current assets	$	—	$	48	$	48	$	—	$	12	$	12
Interest rate contracts:
Other current assets	—		4		4		—		—		—
Other assets	—		13		13		—		—		—
Commodity contracts:
Other current assets	9		—		9		9		—		9
Total assets	$	9	$	65	$	74	$	9	$	12	$	21
Liabilities:
Foreign currency exchange contracts:
Other current liabilities	$	—	$	(73)	$	(73)	$	—	$	(18)	$	(18)
Other liabilities	—		(4)		(4)		—		—		—
Interest rate contracts:
Other current liabilities	—		(6)		(6)		—		—		—
Other liabilities	—		(22)		(22)		—		(13)		(13)
Commodity contracts:
Other current liabilities	(1)		—		(1)		(1)		—		(1)
Total liabilities	$	(1)	$	(105)	$	(106)	$	(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 January 2, 2021 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)
		January 2, 2021		December 28, 2019		January 2, 2021		December 28, 2019
Interest rate contracts	Current maturities of long-term debt	$	—	$	493	$	—	$	—
Interest rate contracts	Long-term debt	$	2,568	$	2,643	$	25	$	19

(a)The hedged long-term debt includes $16 million and $15 million of hedging adjustment on discontinued hedging relationships as of January 2, 2021 and December 28, 2019, respectively.

Offsetting Assets

As of January 2, 2021
			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	$	164	$	(116)	$	—	$	48
Total liability derivatives	$	(143)	$	116	$	5	$	(22)

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)

Offsetting Liabilities

As of January 2, 2021
			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	$	164	$	(116)	$	—	$	48
Total liability derivatives	$	(143)	$	116	$	5	$	(22)

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 Instrument on the Consolidated Statement of Income

The effect of derivative instruments on the Consolidated Statement of Income for the years ended January 2, 2021 and December 28, 2019 were 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
	2020		2019		2020		2019
Foreign currency denominated long-term debt	$	(236)	$	60	$	—	$	—
Cross-currency contracts	(93)		6		34		34		Interest expense
Total	$	(329)	$	66	$	34	$	34

Derivatives not designated as hedging instruments
(millions)	Location of gain (loss) recognized in income	Gain (loss) recognized in income
		2020		2019
Foreign currency exchange contracts	COGS	$	11	$	(16)
Foreign currency exchange contracts	SGA	(1)		(2)
Foreign currency exchange contracts	OIE	(6)		(4)
Interest rate contracts	Interest expense	2		—
Commodity contracts	COGS	6		4
Total		$	12	$	(18)

The effect of fair value and cash flow hedge accounting on the Consolidated Income Statement for the years ended January 2, 2021 and December 28, 2019:

		January 2, 2021		December 28, 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		$	281	$	284
	Gain (loss) on fair value hedging relationships:
	Interest contracts:
	Hedged items	(7)		(33)
	Derivatives designated as hedging instruments	7		37
	Gain (loss) on cash flow hedging relationships:
	Interest contracts:
	Amount of gain (loss) reclassified from AOCI into income	(14)		(4)

Available-for-sale securities

The following is a summary of the carrying and market values of the Company's available for sale securities:

	2020						2019
(millions)	Cost		Unrealized Gain (Loss)		Market Value		Cost		Unrealized Gain/(Loss)		Market Value
Corporate Bonds	$	62	$	3	$	65	$	—	$	—	$	—