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DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS DERIVATIVE INSTRUMENTS AND HEDGING TRANSACTIONS
DERIVATIVES AND HEDGING ACTIVITIES
The Company uses derivative financial instruments to manage its risks related to interest rates, foreign currency exchange rates, and commodity prices. Derivative financial instruments are not used for trading or other speculative purposes.
CREDIT RISK MANAGEMENT
The Company continues to monitor the creditworthiness of its counterparties to mitigate the risk of nonperformance. Financial instruments, including derivatives, expose the Company to counterparty credit risk. In addition, the Company grants credit terms to its customers in the normal course of business. The terms and conditions of the Company's credit sales are designed to mitigate or eliminate concentrations of credit risk with any single customer. The Company's sales are not materially dependent on a single customer or a small group of customers.
INTEREST RATE RISK MANAGEMENT
Financial instruments, including derivatives, expose the Company to market risk related to changes in interest rates. The Company uses a combination of financial instruments, including long-term, medium-term, and short-term financing, variable-rate commercial paper, and interest rate swaps to convert the interest rate mix of the Company's total debt portfolio and related overall cost of borrowing.
FOREIGN CURRENCY RISK MANAGEMENT
The Company operates a global business in a wide variety of foreign currencies. The Company's exposure to market risk for changes in foreign currency exchange rates arises from international financing activities between subsidiaries, foreign currency denominated monetary assets and liabilities, and transactions arising from international trade. The Company's objective is to preserve the U.S. dollar value of foreign currency denominated cash flows and earnings. The Company monitors its collective foreign currency exposure and enters into foreign currency exchange forward and option contracts (foreign currency exchange contracts) with third parties, when necessary, to minimize the impact of changes in foreign currency exchange rates.
The Company has monetary assets and liabilities denominated in non-functional currencies. Prior to conversion into U.S. dollars, these assets and liabilities are remeasured at spot exchange rates as of the balance sheet date. The Company recognizes effects of changes in spot rates in Other (income) expense.
The Company uses foreign currency exchange contracts to hedge foreign currency exposure. These contracts are marked-to-market in net income and offset gains and losses on the non-functional currency denominated monetary assets and liabilities being hedged. The Company also uses foreign currency contracts to hedge forecasted sales and purchases, which are denominated in non-functional currencies. Changes in the forecasted non-functional currency cash flows due to movements in exchange rates are substantially offset by changes in the fair value of these foreign currency exchange contracts designated as hedges. Market value gains and losses on these contracts are recognized in earnings when the hedged transaction is recognized. As of December 31, 2024, and 2023, the Company held contracts with notional amounts of $10,008 million and $8,910 million, respectively, to exchange foreign currencies, principally the U.S. dollar, euro, Canadian dollar, British pound, Mexican peso, Chinese renminbi, and Indian rupee.
The Company also designates certain foreign currency debt and derivative contracts as hedges against portions of its net investment in foreign operations. Gains or losses of the foreign currency debt and derivative contracts designated as net investment hedges are recorded in the same manner as foreign currency translation adjustments.
COMMODITY PRICE RISK MANAGEMENT
The Company's operations subject the Company to risk related to the price volatility of certain commodities. To mitigate the commodity price risk associated with the Company's operations, the Company may enter into commodity derivative instruments. In both 2024 and 2023, the Company entered into various contracts to mitigate commodity price volatility. The Company elected to apply hedge accounting to these contracts.
DERIVATIVE AND HEDGING INSTRUMENTS
The following table summarizes the notional amounts and fair values of the Company’s outstanding derivatives by risk category and instrument type within the Consolidated Balance Sheet:
NotionalFair Value AssetFair Value (Liability)
December 31, 2024December 31, 2023December 31, 2024December 31, 2023December 31, 2024December 31, 2023
Derivatives in fair value hedging relationships   
Interest rate swap agreements$3,899 $4,717 $3 $18 $(139)$(184)
Derivatives in cash flow hedging relationships
Foreign currency exchange contracts1,235 712 30 28 (10)(4)
Commodity contracts1 6 — — — (1)
Derivatives in net investment hedging relationships
Cross currency swap agreements7,214 4,264 124 — (56)(145)
Total derivatives designated as hedging instruments12,349 9,699 157 46 (205)(334)
Derivatives not designated as hedging instruments
Foreign currency exchange contracts8,773 8,198 3 7 (5)(5)
Total derivatives at fair value$21,122 $17,897 $160 $53 $(210)$(339)
All Derivative assets are presented in Other current assets or Other assets. All Derivative liabilities are presented in Accrued liabilities or Other liabilities.
In addition to the foreign currency derivative contracts designated as net investment hedges, certain of the Company's foreign currency denominated debt instruments are designated as net investment hedges. The carrying value of those debt instruments designated as net investment hedges, which includes the adjustment for the foreign currency transaction gain or loss on those instruments, was $6,158 million and $6,099 million as of December 31, 2024, and 2023, respectively.
Interest rate swap agreements are designated as hedge relationships with gains or losses on the derivative recognized in Interest and other financial charges offsetting the gains and losses on the underlying debt being hedged. Gains and losses on interest rate swap agreements recognized in earnings were $30 million of expense, $121 million of income, and $347 million of expense for the years ended December 31, 2024, 2023, and 2022, respectively. Gains and losses are fully offset by losses and gains on the underlying debt being hedged.
The following table sets forth the amounts recorded in the Consolidated Balance Sheet related to cumulative basis adjustments for fair value hedges:
Carrying Amount
of Hedged Item		Cumulative Amount of
Fair Value Hedging Adjustment
Included in the Carrying
Amount of Hedged Item
December 31, 2024December 31, 2023December 31, 2024December 31, 2023
Long-term debt$3,763 $4,551 $(136)$(166)
The following tables summarize the location and impact to the Consolidated Statement of Operations related to derivative instruments:
 Year Ended December 31, 2024
Net SalesCost of
Products Sold		Cost of
Services Sold
Selling, General and
Administrative Expenses
Other
(Income) Expense
Interest and Other
Financial Charges
$38,498 $17,227 $6,609 $5,466 $(830)$1,058 
Gain (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive loss into income2 8 3 4 — — 
Gain (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — (30)
Derivatives designated as hedges— — — — — 30 
Gain (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — 105 — 
 Year Ended December 31, 2023
Net SalesCost of
Products Sold
Cost of
Services Sold
Selling, General and
Administrative Expenses
Other
(Income) Expense
Interest and Other
Financial Charges
$36,662 $16,977 $6,018 $5,127 $(840)$765 
Gain (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive loss into income15 28 10 10 — — 
Gain (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — (121)
Derivatives designated as hedges— — — — — 121 
Gain (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — (116)— 
 Year Ended December 31, 2022
Net SalesCost of
Products Sold
Cost of
Services Sold
Selling, General and
Administrative Expenses
Other
(Income) Expense
Interest and Other
Financial Charges
$35,466 $16,955 $5,392 $5,214 $(366)$414 
Gain (loss) on cash flow hedges
Foreign currency exchange contracts
Amount reclassified from accumulated other comprehensive loss into income13 50 14 (3)— — 
Commodity contracts
Amount reclassified from accumulated other comprehensive loss into income— (2)— — — — 
Gain (loss) on fair value hedges
Interest rate swap agreements
Hedged items— — — — — 347 
Derivatives designated as hedges— — — — — (347)
Gain (loss) on net investment hedges
Foreign currency exchange contracts
Amount excluded from effectiveness testing recognized in earnings using an amortization approach— — — — — 13 
Gain (loss) on derivatives not designated as hedging instruments
Foreign currency exchange contracts— — — — 351 — 
As of December 31, 2024, the Company estimates that approximately $20 million of net derivative gains related to its cash flow hedges included in Accumulated other comprehensive loss will be reclassified into earnings within the next 12 months.
The following table summarizes the amount of pre-tax gain or (loss) on net investment hedges recognized in Accumulated other comprehensive loss:
Years Ended December 31,
20242023
Euro-denominated long-term debt$249 $(84)
Euro-denominated commercial paper72 (42)
Cross currency swap agreements190 (193)