Derivatives (Tables)

12 Months Ended

Dec. 31, 2018

Derivatives

Gain (loss) on derivative instruments designated as cash flow hedges

Pretax Gain (Loss) Recognized in

Pretax Gain (Loss)

Income on Effective Portion of

Ineffective Portion of Gain

Recognized in Other

Derivative as a Result of

(Loss) on Derivative and

Comprehensive

Reclassification from

Amount Excluded from

Income on Effective

Accumulated Other

Effectiveness Testing

Year ended December 31, 2018

Portion of Derivative

Comprehensive Income

Recognized in Income

(Millions)

Amount

Location

Amount

Location

Amount

Foreign currency forward/option contracts

151

Cost of sales

(95)

Cost of sales

—

Interest rate swap contracts

(18)

Interest expense

(1)

Interest expense

—

Total

133

(96)

—


Year ended December 31, 2017	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	(305)	Cost of sales	$	8	Cost of sales	$	—
Interest rate swap contracts		(6)	Interest expense		(1)	Interest expense		—
Total	$	(311)		$	7		$	—


Year ended December 31, 2016	Portion of Derivative		Comprehensive Income			Recognized in Income
(Millions)	Amount		Location	Amount		Location	Amount
Foreign currency forward/option contracts	$	58	Cost of sales	$	110	Cost of sales	$	—
Interest rate swap contracts		(1)	Interest expense		(1)	Interest expense		—
Total	$	57		$	109		$	—

Gain (loss) on derivative instruments designated as fair value hedges


	Gain (Loss) on Derivative			Gain (Loss) on Hedged Item
Year ended December 31, 2018	Recognized in Income			Recognized in Income
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(5)	Interest expense	$	5
Total		$	(5)		$	5


Year ended December 31, 2017
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(9)	Interest expense	$	9
Total		$	(9)		$	9


Year ended December 31, 2016
(Millions)	Location	Amount		Location	Amount
Interest rate swap contracts	Interest expense	$	(2)	Interest expense	$	2
Total		$	(2)		$	2

Gain (loss) on derivative and non-derivative instruments designated as net investment hedges


	Pretax Gain (Loss)
	Recognized as
	Cumulative Translation
	within Other		Ineffective Portion of Gain (Loss) on
	Comprehensive Income		Instrument and Amount Excluded
	on Effective Portion of		from Effectiveness Testing
Year ended December 31, 2018	Instrument		Recognized in Income
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	222	Cost of sales	$	(2)
Foreign currency forward contracts		18	Cost of sales		4
Total	$	240		$	2


Year ended December 31, 2017	Comprehensive Income		Instrument and Amount Excluded
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	(667)	N/A	$	—
Foreign currency forward contracts		(58)	Cost of sales		7
Total	$	(725)		$	7


Year ended December 31, 2016	Comprehensive Income		Instrument and Amount Excluded
(Millions)	Amount		Location	Amount
Foreign currency denominated debt	$	215	N/A	$	—
Foreign currency forward contracts		(9)	Cost of sales		(3)
Total	$	206		$	(3)

Gain (loss) on derivative instruments not designated as hedging instruments

The location in the consolidated statements of income and amounts of gains and losses related to derivative instruments not designated as hedging instruments are as follows:


	Gain (Loss) on Derivative Recognized in Income
		Year ended December 31,
			2018		2017		2016
(Millions)	Location		Amount		Amount		Amount
Foreign currency forward/option contracts	Cost of sales	$	13	$	11	$	(14)
Foreign currency forward contracts	Interest expense		(109)		(141)		9
Total		$	(96)	$	(130)	$	(5)

Location and Fair Value of Derivative Instruments


	Gross		Assets			Liabilities
December 31, 2018	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,277	Other current assets	$	74	Other current liabilities	$	12
Foreign currency forward/option contracts		1,099	Other assets		39	Other liabilities		4
Interest rate swap contracts		1,000	Other current assets		—	Other current liabilities		14
Interest rate swap contracts		1,403	Other assets		19	Other liabilities		17
Total derivatives designated as hedging instruments				$	132		$	47

Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	2,484	Other current assets	$	14	Other current liabilities	$	6
Total derivatives not designated as hedging instruments				$	14		$	6

Total derivative instruments				$	146		$	53


	Gross		Assets			Liabilities
December 31, 2017	Notional			Fair			Fair
(Millions)	Amount		Location	Value Amount		Location	Value Amount
Derivatives designated as
hedging instruments
Foreign currency forward/option contracts	$	2,204	Other current assets	$	7	Other current liabilities	$	109
Foreign currency forward/option contracts		1,392	Other assets		20	Other liabilities		56
Interest rate swap contracts		450	Other current assets		—	Other current liabilities		1
Interest rate swap contracts		1,503	Other assets		21	Other liabilities		6
Total derivatives designated as hedging instruments				$	48		$	172

Derivatives not designated as
hedging instruments
Foreign currency forward/option contracts	$	4,974	Other current assets	$	30	Other current liabilities	$	25
Total derivatives not designated as hedging instruments				$	30		$	25

Total derivative instruments				$	78		$	197

Offsetting Assets

Offsetting of Financial Assets under Master Netting Agreements with Derivative Counterparties


			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Assets		Gross Amount of
	Presented in the		Eligible Offsetting
December 31, 2018	Consolidated		Recognized		Cash Collateral		Net Amount of
(Millions)	Balance Sheet		Derivative Liabilities		Received		Derivative Assets
Derivatives subject to master netting agreements	$	146	$	38	$	—	$	108
Derivatives not subject to master netting agreements		—						—
Total	$	146					$	108


December 31, 2017
(Millions)
Derivatives subject to master netting agreements	$	78	$	27	$	—	$	51
Derivatives not subject to master netting agreements		—						—
Total	$	78					$	51

Offsetting Liabilities

Offsetting of Financial Liabilities under Master Netting Agreements with Derivative Counterparties


			Gross Amounts not Offset in the
			Consolidated Balance Sheet that are Subject
	Gross Amount of		to Master Netting Agreements
	Derivative Liabilities		Gross Amount of
	Presented in the		Eligible Offsetting
December 31, 2018	Consolidated		Recognized		Cash Collateral		Net Amount of
(Millions)	Balance Sheet		Derivative Assets		Pledged		Derivative Liabilities
Derivatives subject to master netting agreements	$	53	$	38	$	—	$	15
Derivatives not subject to master netting agreements		—						—
Total	$	53					$	15


December 31, 2017
(Millions)
Derivatives subject to master netting agreements	$	197	$	27	$	—	$	170
Derivatives not subject to master netting agreements		—						—
Total	$	197					$	170