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44 | 2015 Annual Report
(7) Financial Instruments
HEDGING ACTIVITIES
As of September 30, 2015, the notional amount of foreign currency hedge positions was approximately $1.6 billion,
while commodity hedge contracts totaled approximately 71 million pounds ($174) of copper and aluminum. All
derivatives receiving deferral accounting are cash flow hedges. The majority of hedging gains and losses deferred
as of September 30, 2015 are expected to be recognized over the next 12 months as the underlying forecasted
transactions occur. Gains and losses on foreign currency derivatives reported in other deductions, net reflect hedges
of balance sheet exposures that do not receive deferral accounting. Amounts included in earnings and other
comprehensive income follow:
GAIN (LOSS) TO
GAIN (LOSS) TO EARNINGS OTHER COMPREHENSIVE INCOME
2013 2014 2015 2013 2014 2015
Location
Commodity Cost of sales $(15) (12) (24) (22) (16) (43)
Foreign currency Sales, cost of sales 24 10 (12) 4 15 (61)
Foreign currency Other deductions, net (5) (3) 14
Total $4 (5) (22) (18) (1) (104)
Regardless of whether derivatives receive deferral accounting, the Company expects hedging gains or losses to be
essentially offset by losses or gains on the related underlying exposures. The amounts ultimately recognized will
differ from those presented above for open positions, which remain subject to ongoing market price fluctuations
until settlement. Derivatives receiving deferral accounting are highly effective and no amounts were excluded from
the assessment of hedge effectiveness. Hedge ineffectiveness was immaterial in all years shown.
FAIR VALUE MEASUREMENT
The estimated fair value of long-term debt was $4,936 and $4,492, respectively, as of September 30, 2015 and
2014, which exceeded the carrying value by $356 and $411, respectively. As of September 30, 2015, the fair value
of commodity contracts and foreign currency contracts was reported in other current assets and accrued expenses.
Valuations of derivative contract positions as of September 30 follow:
ASSETS LIABILITIES ASSETS LIABILITIES
2014 2014 2015 2015
Foreign currency $32 20 30 65
Commodity $1 10 — 29
(8) Short-Term Borrowings and Lines of Credit
Short-term borrowings and current maturities of long-term debt are as follows:
2014 2015
Current maturities of long-term debt $ 522 291
Commercial paper 1,938 2,261
Payable to banks 5 1
Total $2,465 2,553
Interest rate for weighted-average short-term borrowings at year end 0.2% 0.2%
The Company routinely issues commercial paper as a source of short-term financing. In April 2014, the Company
entered into a $3.5 billion five-year revolving backup credit facility with various banks, which replaced a December
2010 $2.75 billion facility. The credit facility is maintained to support general corporate purposes, including
commercial paper borrowing. The Company has not incurred any borrowings under this or previous facilities. The
credit facility contains no financial covenants and is not subject to termination based on a change of credit rating or
material adverse changes. The facility is unsecured and may be accessed under various interest rate and currency
denomination alternatives at the Company’s option. Fees to maintain the facility are immaterial.